Gold edges higher on weaker dollar, US inflation data in focus

Gold prices edged upward on Thursday, buoyed by a weaker US dollar, as traders awaited crucial inflation data from the United States that could influence the Federal Reserve's interest rate decisions. Spot gold prices rose 0.3% to $4,412.84 per ounce, while December US gold futures slipped 0.1% to $4,457.10. Analyst Edward Meir noted that geopolitical tensions in the Persian Gulf are secondary concerns, as gold is rising due to a weaker dollar, which is more affordable for non-US investors.

The US dollar remained relatively weak, making dollar-denominated metals less costly for holders of other currencies.

Key economic indicators, including the US Producer Price Index and consumer inflation figures, were set to be released later in the week. The Federal Reserve announced it would maintain interest rates at their current level during its September 15-16 meeting and for the rest of the year, defying expectations for additional rate hikes. According to a Reuters poll, economists were divided on whether a rate increase would occur this month, with a 60% chance priced in by the market.

Gold's appeal is further amplified by mounting US fiscal pressures, which have pushed total debt over $40 trillion for the first time, raising concerns about a potential fiscal crisis. Meanwhile, geopolitical tensions escalated when Iran announced it had targeted 10 ships near the Strait of Hormuz following the US sinking of five Iranian oil tankers.

This marked the largest wave of attacks on maritime traffic by both nations since the six-month conflict began. Silver rose 0.2% to $67.42 per ounce, platinum declined 0.6% to $1,885.02, and palladium increased 0.2% to $1,355.50.