Gold gains for third session, inflation reports in focus
Gold rose for a third straight session on Tuesday to its highest in more than two months, while investors focused on upcoming inflation data for clues on the U.S. interest-rate outlook.
Spot gold climbed 1% to $4,432.74 per ounce by 0217 GMT, hitting its highest level since June 5. U.S. gold futures rose 1.7% to $4,492.60.
The move "is being driven by a degree of FOMO (fear of missing out) from those who missed the dip to $4,000, some short-covering from speculative accounts, and a return of safe-haven flows," IG market analyst Tony Sycamore said.
"In the medium term, we do expect prices to break and open the way for a stronger recovery towards $5,000."
The U.S. consumer price report due on Wednesday and producer price data on Thursday are likely to shape monetary policy expectations after weak July U.S. jobs data last week led markets to scale back bets that the Federal Reserve would raise rates next month.
At its July meeting, the Federal Reserve kept rates steady, with three officials dissenting in favor of a hike.
Lower interest rates tend to support gold as bullion pays no interest.
"If the data continue to point towards a cooling economy without a meaningful resurgence in inflation, markets could further reduce expectations for tighter policy. That would likely leave the dollar vulnerable and provide another supportive backdrop for gold," Fawad Razaqzada, a market analyst at Forex.com, said in a note.
On the geopolitical front, U.S. President Donald Trump responded to Iran's conditions for a peace deal with his own demands that Iran pay compensation for people killed in wars, attacks and protests, in a rhetorical escalation likely to complicate efforts to reopen the Strait of Hormuz.
Among other metals, spot silver rose 0.9% to $66.30 per ounce, platinum gained 0.7% to $1,765.26 and palladium climbed 0.8% to $1,394.00.
