Gold gains as dollar eases with US inflation data on radar

Gold prices climbed on ​Tuesday as the US dollar slipped, with focus on upcoming inflation ‌data that could shape expectations for the Federal Reserve’s next policy move.

Spot gold was up 0.6% at $4,429.89 per ounce, as of 0208 GMT.

US gold futures for December delivery ​were little changed at $4,475.10.

The US dollar index ticked 0.4% lower, making ​greenback-priced metals more affordable for other currency holders.

“Gold remains locked in ⁠a battle between buyers and sellers, with neither party showing enough conviction ​to drive a sustained and persistent directional move,” said Chris Weston, head of ​research at Pepperstone Group.

The US producer price index data is due on Thursday, and the consumer price index data is scheduled for Friday.

Spot gold fell in the previous two sessions ​after data showed US job growth accelerated sharply in August, while the unemployment ​rate held steady at 4.1%, suggesting an improvement in the labor market.

According to the CME ‌FedWatch ⁠Tool, traders currently see a 60% chance of a rate hike at the Fed’s policy meeting next week. Elevated rates tend to reduce the appeal of non-yielding gold.

“We don’t see gold falling back too much if and when ​the central bank does ​raise rates. ⁠More important than the rate move is the notion that markets are somewhat uneasy about what the Fed and the ​Treasury are signalling,” Marex analyst Edward Meir said in ​a monthly ⁠note.

On the geopolitical front, Iran threatened the United States with “economic warfare” and said it had fired an advanced missile at US warships, underscoring the risks of further escalation ⁠in ​the war only days after both sides traded ​blows again.

Among other metals, spot silver gained 1% at $66.78 per ounce, platinum rose 0.4% at $1,834.00, and ​palladium firmed 1% to $1,402.87.