Gold Holds Steady Ahead of US Inflation Data as Tensions Escalate

Gold prices have stabilized above $4,400 as traders appear hesitant to make significant moves ahead of this week's US inflation data. The upcoming release of the US Producer Price Index (PPI) report on Thursday and Consumer Price Index (CPI) on Friday will provide crucial insights into the Federal Reserve's policy path, which in turn could influence USD price dynamics and impact gold prices.

The market is pricing in a 60% chance of a Fed rate hike at its upcoming policy meeting on September 15-16, following last week's better-than-expected US Nonfarm Payrolls (NFP) report. Additionally, persistently high energy prices are contributing to inflation risks and increasing prospects for immediate Fed tightening.

Meanwhile, tensions between the US and Iran continue to escalate, with Iran attacking 10 ships near the Strait of Hormuz. This has led to a further surge in crude oil prices, which in turn supports the case for a more hawkish stance from major central banks.