Gold Treads Water Ahead of Key Inflation Data Amid Rising Rate Hike Bets

Gold prices hovered around $4,400 an ounce on Tuesday as investors awaited key US inflation data. The non-yielding asset is caught between rising bets of a Federal Reserve rate hike and a softer dollar ahead of the crucial release.

The recent rise in oil prices has also fueled inflation concerns, with crude extending gains to multi-week highs due to escalating Middle East tensions. Yemen's Iran-backed Houthis attacked energy facilities and cities in Saudi Arabia, a key US ally.

Market expectations are that the Fed may raise interest rates at its September meeting, with traders pricing in about a 60% chance of such an event. This would typically weigh on gold's appeal as investors seek higher-yielding assets.