Gold Price Inches Up Amid Rate Hike Fears

Gold prices are inching up on Wednesday, but still poised for a monthly decline. The precious metal is currently trading at $4,188.17 an ounce, a 0.2% increase from the previous day's close. US gold futures also rose by 1% to $4,219.90.

The dollar's weakness has made gold more affordable for investors holding other currencies, but its price is still under pressure due to expectations of another interest rate hike in the US. Giovanni Staunovo, analyst at UBS, attributes gold's recent weakness to higher oil prices and increased probability of further US rate hikes.

As gold does not offer a yield, higher interest rates make it less attractive than other assets. Jamie Dutta, market analyst at Nemo.money, notes that gold is 'very sensitive to expectations around Fed hikes and statements from officials.'

Investors are now waiting for the release of the personal consumption expenditures (PCE) price index later today, which could provide clues on the possibility of a rate hike. The US central bank has already increased rates by a quarter percentage point this month, and additional hikes seem likely.