Gold remains steady amid subdued dollar, US Iran tensions

Spot gold edged lower by 0.49%, trading at $4,384.39 an ounce at 10:10 am PST on Wednesday, Mettis Global reported. A weaker greenback made bullion more affordable for those paying in other currencies, giving prices some backing. Renewed friction between the United States and Iran also formed part of the market backdrop.

Tensions in the Middle East deepened as Houthi forces in Yemen, which are backed by Iran, struck several Saudi cities. US forces hit several Iranian oil tankers, and Iran answered by attacking an American base in Jordan. Brent crude rose for a fourth session in a row, and higher energy costs are generally viewed as feeding inflation. Gold is often considered a hedge against inflation, yet higher interest rates reduce its appeal since it pays no income.

Investors are now looking ahead to US producer price data on Thursday and consumer price figures on Friday. CNBC noted these figures may give further hints about where Federal Reserve policy is heading. The CME FedWatch Tool shows market odds of about 60% for a hike in borrowing costs when officials next convene. Among other metals, silver rose 0.4% to $66.00, platinum gained 1% to $1,831.76 and palladium dipped 0.3% to $1,344.69.