Gold Climbs After Three-day Slide

(RTTNews) - Gold prices traded higher on Wednesday despite renewed tensions in the Gulf region and lingering rate-hike worries.

Spot gold jumped nearly 1 percent to $4,396.31 an ounce after falling for three straight sessions. U.S. gold futures were marginally higher at $4,440 an ounce.

The U.S. dollar extended losses for a third straight session ahead of U.S. inflation data due this week, which could offer additional clues on the Federal Reserve's rate trajectory.

Markets now put the odds of a Federal Reserve rate hike on September 16 at about 60 percent, but the decision largely hinges on upcoming CPI and PPI inflation data.

The producer price index for August is due on Thursday, followed by the consumer price index on Friday.

As energy costs climb, the European Central Bank (ECB) is all but certain to raise interest rates by 25 basis points on Thursday.

The dollar index is facing downward pressure primarily driven by a sharp rally in the Japanese yen, which reached a seven-month high after U.S. Treasury Secretary Scott Bessent challenged traders to counter his efforts to strengthen Japan's currency.

Elsewhere, data showed earlier in the day that China's consumer inflation accelerated for the first time since April in August and factory-gage prices grew faster than expected, driven by higher commodity and food prices.

Investors were also reacting to escalating Middle East hostilities. Brent crude futures jumped over 2 percent to trade above $100 a barrel, reaching a near seven-week high after U.S. forces destroyed five Iranian tankers and Tehran responded with missile strikes on Jordan, raising fears of a wider regional conflict.

In trade news, the White House said a ban on imports of some dairy products and motorcycles from Canada along with most alcoholic beverages would take effect in three weeks, on Sept. 29, escalating the ongoing trade war between the two neighbors and longtime allies. The ban comes after retaliatory tariffs promised by Canada kicked in earlier Tuesday.