NEW YORK: Gold climbed on Wednesday, supported by a softer US dollar, while investors weighed inflationary pressures from renewed attacks in the Middle East and awaited key price data for clues on the Federal Reserve’s policy outlook.
Spot gold rose 1.1percent to USD4,401.60 per ounce by 1116 GMT, while US gold futures for December delivery gained 0.1percent to USD4,445.30. The US dollar softened, making greenback-priced bullion more affordable for buyers overseas.
“Gold is drawing ample support from a weaker dollar and technical buying, bouncing from its 100-day moving average,” said Lukman Otunuga, senior research analyst at FXTM.
“Gold and oil don’t always move together, and this week’s price action is a good example of why, even with Brent’s break above USD100. A broader dollar softness is outweighing the pressure today, with gold’s near-term direction ultimately decided by this week’s inflation data.”
Investors are bracing themselves for producer price index (PPI) data due on Thursday and consumer price index data on Friday. Traders are now pricing about a 60percent chance of an interest rate hike at the central bank’s policy meeting next week, according to the CME FedWatch Tool.
Meanwhile, Iran’s Revolutionary Guard said it fired ballistic missiles at a base in Jordan used by the US military and attacked 10 ships on Wednesday, after Washington said it had destroyed five Iranian oil tankers. Brent crude prices rose past USD100 a barrel on Wednesday, for the first time since July 24.
Although gold is typically seen as an inflation hedge, higher rates tend to diminish non-yielding bullion’s appeal. “Bears may focus on an emerging head-and-shoulders formation, with a break below USD4,300 potentially signalling a deeper correction towards the established support area around USD4,000,” said Ole Hansen, head of commodity strategy at Saxo Bank in a note.
Among other metals, spot silver gained 1percent to USD66.30 per ounce, platinum climbed 2.2percent to USD1,852.69, and palladium rose 0.2percent to USD1,351.37.
The global platinum market will swing to a surplus for the first time since 2022 this year due to weaker investment and jewellery demand, the World Platinum Investment Council said.