Gold Prices Firm on Weaker US Dollar Amid Interest Rate Hopes

Gold prices rose on Wednesday as the US dollar remained subdued, making metals priced in the greenback more affordable for holders of other currencies.

The spot gold price was up 0.6% at $4,381.32 per ounce by 0505 GMT, while US gold futures lost 0.3% to $4,424.70.

Kelvin Wong, senior market analyst at Oanda, noted that there is a 'tug of war' between bulls and bears in the short term, with prices potentially influenced until the end of this week's consumer price index report.

Expectations of a hawkish Federal Reserve weigh on gold, but concerns about fiscal deficits remain supportive for prices. Markets are awaiting Thursday's US producer price index data and Friday's CPI release.

Brent crude prices jumped for a fourth consecutive session, with rising oil costs potentially putting upward pressure on inflation. According to the CME FedWatch Tool, traders see around a 60% chance that the Federal Reserve will raise interest rates at its upcoming policy meeting.