Kathmandu — With the US dollar weakening, international gold prices climbed on Tuesday. Investors are closely watching upcoming US inflation data, which could influence the Federal Reserve’s monetary policy decisions. Spot gold rose 0.65% (about $27) to reach $4,439 per ounce. The US dollar index fell by 0.4%, making dollar-priced metals like gold cheaper for investors using other currencies, thereby boosting demand.
Markets await the Producer Price Index (Thursday) and Consumer Price Index (Friday), which are expected to shape expectations for the Fed’s next meeting. Previously, stronger-than-expected US job growth and stable unemployment at 4.1% had pushed gold prices down in the last two sessions. Analysts note that labor market strength could further affect Fed interest rate decisions.
Currently, there is about a 60% chance of a rate hike in the upcoming Fed meeting. Higher interest rates typically reduce gold’s appeal since it offers no yield. Meanwhile, rising geopolitical tensions in the Middle East are also driving gold demand. Iran has warned the US of “economic war” and claimed to have fired advanced missiles at American warships, escalating regional risks. Such uncertainty often increases gold’s status as a safe-haven investment.
