Gold Soars Amid Escalating Middle East Tensions and Weakening Dollar

Gold has surged to its highest level in weeks as investors anticipate renewed inflation risks due to escalating tensions in the Middle East. The US dollar hit a four-month low, with markets pricing in around a 60% chance of a Federal Reserve rate hike at next week's policy meeting.

Oil prices have also spiked to their highest level in over three months as US-Iran tensions intensify. Iran's Revolutionary Guard has fired ballistic missiles at a US-used military base in Jordan and attacked 10 ships on Wednesday, after Washington said it had destroyed five Iranian oil tankers.

The producer-price data due Thursday and the consumer price index on Friday will provide key input into expectations for the Fed's policy decision on September 16. Gold rose above $4,390 an ounce as investors sought safe-haven assets amidst renewed inflation risks.