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

Gold edged higher on Thursday, buoyed by a weaker US dollar and anticipation of crucial inflation data from the Federal Reserve, which may influence its interest rate decisions. Spot gold climbed 0.3% to $4,414.28 per ounce as of 0419 GMT, while US gold futures for December delivery slipped 0.1% to $4,457.20. Analyst Edward Meir noted that geopolitical events in the Persian Gulf are less significant for gold's current rise, which is driven by the dollar's decline, making dollar-based metals cheaper for those holding other currencies.

The US dollar exhibited weakness, making gold more appealing to investors holding currencies other than dollars. The US Producer Price Index figures are expected at 1230 GMT, and consumer inflation data will be released on Friday. The Federal Reserve is set to maintain interest rates at their September 15-16 meeting and throughout the rest of the year, contrary to many economists' expectations of multiple raises, according to a Reuters poll.

Markets currently estimate a 60% probability of a US rate hike this month, as indicated by the CME FedWatch Tool. Higher interest rates typically make non-yielding assets less attractive, benefiting gold. Daniel Hynes, senior commodities strategist at ANZ, attributed gold's support to ongoing fiscal pressures in the US, which erode confidence in the long-term value of government debt and the dollar used to finance it.

Earlier this month, total US debt surpassed $40 trillion for the first time, prompting warnings of a looming fiscal crisis. On the geopolitical front, Iran announced on Wednesday that it had targeted 10 ships near the Strait of Hormuz following the US sinking of five Iranian oil tankers, marking the most significant wave of attacks by both sides since the six-month-old war began. Silver rose 0.3% to $67.50 per ounce, platinum fell 0.4% to $1,888.05, while palladium increased 0.2% to $1,356.20.