Gold rises as dollar eases; US inflation data on radar

Gold experienced a slight increase on Tuesday (Sep 8) as the US dollar weakened, attracting investors' attention to upcoming inflation data that could impact expectations for the Federal Reserve's next policy decision. The price of gold rose by 0.1 per cent to $4,407.27 per ounce, while US gold futures for December delivery decreased by 0.6 per cent to $4,452.10.

Meanwhile, the US dollar index declined by 0.3 per cent, making metals priced in dollars more accessible for holders of other currencies. Analyst Chris Weston from Pepperstone Group stated that gold continues to be caught between buyers and sellers, with neither side displaying sufficient confidence to initiate a persistent movement.

Inflation data from the US producer price index, due on Thursday, and consumer price index report, scheduled for Friday, will be closely monitored. Spot gold had fallen in the previous two sessions following reports of accelerated US job growth in August and a stable unemployment rate of 4.1 per cent, indicating a positive labor market.

Traders view a 58.4 per cent probability of a Federal Reserve rate hike during the upcoming meeting, as indicated by the CME FedWatch tool. Elevated rates typically lessen the attractiveness of gold, which does not yield income. Marex analyst Edward Meir expressed in a monthly note that while gold is not expected to experience a significant drop following a rate increase, the primary concern lies in market unease regarding the central bank and Treasury's indications.

Geopolitical tensions between Iran and the US heightened further, with Iran warning of "economic warfare" and firing an advanced missile at US warships, just days after both countries engaged in previous confrontations. Silver prices increased by 0.1 per cent to $66.21 per ounce, platinum declined by 0.1 per cent to $1,824.58, and palladium fell by 0.2 per cent to $1,385.50.

BMI analysts revised their 2026 platinum price forecast downward to $1,900 per ounce from $2,000 and lowered their palladium forecast to $1,400 per ounce from $1,500, citing reduced automotive demand and an anticipated increase in supply.