Gold Prices Edge Up in Global Market

The global gold ounce rose 0.4% to $4,189 per ounce as oil prices fell.

According to Ambassador Arjan, the price of gold increased slightly on Tuesday, and at the same time as the price of oil decreased, the markets are waiting for the release of US inflation data to get new signs of the future direction of the Federal Reserve's interest rate.

The price of one ounce of cash gold increased by 0.4% to 4189 dollars. The precious metal reached its highest level in a week on Monday. Also, US gold futures for delivery in December rose 0.5% to $4,212 and 50 cents per ounce.

Oil prices fell and were on track to record their first drop in nearly a week. Rising oil prices in the wake of tensions in the Middle East have fueled concerns about inflation and strengthened arguments in favor of continuing contractionary monetary policy. Although gold is known as a hedge against inflation, rising interest rates tend to push investors into yielding assets, reducing the appeal of gold, which has no periodic interest.

The US Consumer Price Index (CPI) is due on Wednesday and the Producer Price Index (PPI) report on Thursday.

The effect of inflation data on the price of gold

"The US consumer price index data will be decisive for the gold market in the short term," said Kyle Ruda, senior financial market analyst at Capital.com.

He added that if the inflation rate is higher than expected, especially in the core inflation sector, and this leads to even a small increase in expectations for an interest rate hike in October, the price of gold may fall again.

According to the "Fedwatch" tool of the Chicago Stock Exchange, traders currently assess the probability of the Federal Reserve raising interest rates this month at only 19%; While the probability of an interest rate increase in December is 85% from their point of view.

Cleveland Federal Reserve President Beth Hamek also said the U.S. central bank would have to move "fairly quickly" toward more accommodative monetary policy to curb inflation. According to him, the range of inflation has widened and this trend is affecting the plans of companies to determine the price of their products and services.

In geopolitical developments, Saudi Arabia announced that it has faced a new wave of missile attacks and Riyadh airport will remain closed until further notice. These developments occurred a few days after the missile attack on the exit terminal of this airport on Saturday; An attack that Yemen's Ansarullah has taken responsibility for.

In the market of other precious metals, the spot price of silver increased by 0.2% to reach 60 dollars and 46 cents per ounce. Platinum was also traded with a growth of 0.5%, $1,694 and 65 cents; While palladium fell 0.2% to $1,141 and 23 cents per ounce.