Gold Edges Higher as Traders Await US Inflation Clues

Spot gold prices rose by 0.7% to $4,401.57 an ounce on Wednesday as traders awaited US inflation data for clues on Federal Reserve interest-rate decisions.

The metal rebounded after a day of decline from a two-month high, as Pakistan's defense minister said the US and Iran are close to reaching an arrangement to reopen the Strait of Hormuz.

A surge in oil prices due to the ongoing conflict in the Middle East has made traders hesitant to bet on large rate hikes ahead of the inflation report, which is expected to show a 0.1% rise in consumer prices for July.

Ole Hansen, head of commodity strategy at Saxo Bank AS, noted that while the macro backdrop has turned more supportive, it remains fragile and can quickly change with renewed inflation pressure or stronger US data.