Gold Edges Higher on Weakening Dollar, Inflation Risks Linger
Gold prices edged higher on Wednesday as the US dollar weakened against the yen, making bullion priced in US currency more competitive for buyers.
The price of spot gold rose 0.3% to $4,418.21 an ounce at 7 a.m. in London, after gaining as much as 0.9% earlier in the session to top $4,440 an ounce.
Japan's currency was closing in on its strongest level against the dollar this year, extending a rally that began last week on growing expectations that the Bank of Japan will hike interest rates.
Bullion generally moves in an inverse pattern to the greenback, so the weakening dollar contributed to gold's gain. However, inflationary risks arising from prolonged disruptions to energy flows via the Strait of Hormuz constrained gold's price increase.
Oil prices have climbed this week after renewed clashes between the US and Iran, with benchmark Brent crude approaching $100 a barrel.