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Gold rebounds as USD pulls back, eyes upcoming US inflation data
Gold is supported by USD downside from a three-week high, while hawkish Fed expectations and geopolitical risk keep the dollar bid ahead of US PPI and CPI.
Gold prices firmed during Tuesday’s Asian session, snapping a two-day decline as the US dollar pulled back from a three-week high, with the yen also rallying, according to FXStreet.
The market tone remains mixed as traders face hawkish Fed expectations, which can support the non-yielding dollar, and persistent geopolitical uncertainty.
FXStreet notes investors are holding back on large directional bets ahead of key US inflation releases later this week, with the US Producer Price Index due Thursday and the Consumer Price Index on Friday.
The outlook is further shaped by bets for a Fed rate hike later this month after accelerated August nonfarm payroll growth, and by Middle East tensions including Iran’s warning of potential retaliation and preparations to enforce a blockade around the Strait of Hormuz, which raises concern about energy supply disruptions and renewed inflation pressure.
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