Gold Prices Climb as Traders Weigh Hormuz Deal Prospects and US Inflation Data

Gold prices rose on Wednesday as traders assessed the prospects for a deal to reopen the Strait of Hormuz and awaited US inflation data that could influence the Federal Reserve's interest-rate path.

The precious metal climbed 0.7% to $4,401.57 an ounce by 11:45 a.m. in Singapore, with oil prices rebounding as the conflict in the Middle East remains deadlocked.

Traders are cautious ahead of the inflation report due later Wednesday, which is expected to show a 0.1% increase in July consumer price index following a 0.4% decline in the prior month, according to a Bloomberg survey of economists.

Ole Hansen, head of commodity strategy at Saxo Bank AS, noted that 'the macro backdrop has turned more supportive, but remains fragile' and warned that renewed inflation pressure or stronger US data could revive rate-hike expectations.