Gold tops $4,390 as dollar slips ahead of US inflation data

Gold rose above $4,390 an ounce on Wednesday as the dollar weakened and investors weighed renewed inflation risks from escalating Middle East tensions ahead of key US inflation readings. The dollar fell to a four-month low as traders awaited producer-price data due Thursday and the consumer price index on Friday, which may be the final major inputs into expectations for the Fed’s policy decision on September 16. Oil climbed to its highest level in more than three months after US-Iran tensions intensified.

Iran’s Revolutionary Guard said it fired ballistic missiles at a US-used military base in Jordan and attacked 10 ships on Wednesday, after Washington said it had destroyed five Iranian oil tankers. Markets are pricing in around a 60% chance of a Fed rate hike at next week’s policy meeting.