Gold rises as dollar eases; US inflation data on radar

Gold prices rose on Tuesday (Sep 8) as the US dollar declined, with attention on upcoming inflation data that could influence expectations for the US Federal Reserve's next policy move. Spot gold increased by 0.6 percent to US$4,429.89 per ounce at 0208 GMT. US gold futures for December delivery were virtually unchanged at US$4,475.10.

The US dollar index edged down 0.4 percent, making greenback-priced metals more accessible for holders of other currencies. Chris Weston, head of research at Pepperstone Group, noted that gold remains in a standoff between buyers and sellers, neither side showing sufficient conviction to initiate a sustained directional shift. The US producer price index data is expected on Thursday, and the consumer price index data is slated for Friday.

Spot gold had dipped in the two prior sessions following news that US job growth surged sharply in August, while the unemployment rate remained stable at 4.1 percent, indicating a positive labor market. The CME FedWatch Tool indicates a 60 percent likelihood of a rate hike at the Fed's upcoming meeting. Elevated rates typically diminish gold's appeal due to its non-yielding nature.

Analyst Edward Meir of Marex stated that while gold may not plummet significantly even if the central bank raises rates, markets are uneasy about the Fed and Treasury's signals. Geopolitically, Iran has warned the US of "economic warfare" and claimed to have launched an advanced missile at US warships, highlighting the risks of further escalation in the conflict just days after both sides engaged in intense confrontations.

Among other precious metals, spot silver gained 1 percent to US$66.78 per ounce, platinum increased by 0.4 percent to US$1,834.00, and palladium rose by 1 percent to US$1,402.87.