Dollar Eases, Gold Rises Ahead of Crucial Inflation Data Releases

Gold prices rose on Tuesday as the US dollar eased, making gold more affordable for holders of other currencies. Spot gold was up 0.3% at $4,418.79 per ounce, while US gold futures for December delivery were down 0.3% at $4,464.80.

The move comes ahead of crucial inflation data releases in the US, with the producer price index set to be announced on Thursday and the consumer price index on Friday. These figures will shape expectations for the Federal Reserve's next policy move, which traders currently see a 60% chance of being a rate hike at the Fed's meeting next week.

However, elevated interest rates tend to reduce the appeal of gold as an inflation hedge. Deutsche Bank now expects the European Central Bank to raise interest rates by 25 basis points in December, adding to a September hike. This decision is driven by persistent energy risks keeping pressure on the inflation outlook.