Gold prices traded cautiously around $4,400 an ounce on Tuesday, as investors weighed growing expectations of a Federal Reserve rate hike against a softer US dollar ahead of key inflation data later this week. Renewed inflation concerns also emerged as oil extended its rally to multi-week highs, driven by escalating tensions in the Middle East after Yemen’s Iran-backed Houthi group attacked energy facilities and cities in Saudi Arabia, a key US ally.
Friday’s stronger‑than‑expected US jobs report underscored the resilience of the labor market, leading traders to assign roughly a 60% probability to a Fed rate hike at the September meeting. Although gold is traditionally regarded as an inflation hedge, rising interest rates typically dampen demand for the non‑yielding metal. Investors are now focused on Thursday’s producer price data and Friday’s consumer price figures for further guidance on the Fed’s policy trajectory.
