Gold climbed above $4,390 an ounce on Wednesday, bolstered by a weaker US dollar as investors weighed renewed inflation risks stemming from escalating tensions in the Middle East and awaited key US price data for guidance on the Federal Reserve’s policy outlook. The dollar fell to a four-month low ahead of producer price figures due Thursday and the consumer price index report on Friday. Together, these releases are expected to provide the final major input into market expectations for the Fed’s September 16 policy decision.
At the same time, oil prices surged to their highest level in more than three months as US–Iran tensions intensified. Iran’s Revolutionary Guard said it had launched ballistic missiles at a military base in Jordan used by US forces and attacked 10 ships on Wednesday, following Washington’s claim that it had destroyed five Iranian oil tankers. Futures markets now imply roughly a 60% probability of a Fed rate hike at next week’s meeting.
