Gold gains as dollar eases with US inflation data on radar

Gold prices rose on Tuesday as the US dollar weakened, with traders keeping an eye on upcoming inflation data that could influence the Federal Reserve's next policy decision. Spot gold climbed 0.6 percent to $4,429.89 per ounce, while US gold futures for December delivery remained flat at $4,475.10. The US dollar index dipped 0.4 percent, making metals priced in greenback terms more accessible for investors holding other currencies.

Analyst Chris Weston of Pepperstone Group noted that gold remains in a tug-of-war between buyers and sellers, neither side having enough confidence to push the price in a consistent direction. Upcoming US producer price index data is expected on Thursday, with the consumer price index due on Friday. Gold prices fell in the previous two sessions following reports of a sharp increase in US job growth in August and a steady unemployment rate of 4.1 percent, indicating a possible improvement in the labor market.

The CME FedWatch Tool shows a 60 percent chance of a Federal Reserve rate hike at the upcoming meeting, which could make non-yielding gold less attractive. Analyst Edward Meir of Marex Securities stated that markets are uneasy about the Fed and Treasury's signals, but a rate hike may not lead to a significant decline in gold prices.

Geopolitical tensions, such as Iran's threat of "economic warfare" and firing an advanced missile at US warships, add to the risks of further escalation in the ongoing conflict. Silver prices increased 1 percent to $66.78 per ounce, platinum rose 0.4 percent to $1,834.00, and palladium gained 1 percent to $1,402.87.