Gold Edges Up Amid Dollar Weakness Ahead of Inflation Data

Gold prices rose by 0.3% to $4,418.79 an ounce as the US dollar softened ahead of key inflation data releases on Thursday and Friday.

The shift in the dollar index (DXY) had a direct impact on gold prices, making dollar-priced metals cheaper for buyers using other currencies.

However, this week's bigger swing factor is the expectation of a potential Fed rate hike at next week's meeting, with the CME FedWatch Tool indicating a 60% chance of a rate increase.

This has significant implications for gold prices, as it affects investors' willingness to hold non-yielding assets like gold. A hotter-than-expected inflation reading could lead to tighter monetary policy and a stronger dollar, making gold more expensive and pressuring spot prices.