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(Bloomberg) -- Gold was steady near $4,400 an ounce, as traders weighed the competing effects of Middle East tensions and the US dollar’s decline against the yen.Bullion was little changed in early trading, after giving up 1.5% over the last two sessions. Renewed clashes between the US and Iran in the Strait of Hormuz have raised oil prices and heightened inflationary concerns, with traders pricing in a roughly 60% likelihood that the Federal Reserve will hike interest rates next week.Tighter monetary policy is typically a headwind for non-yielding gold. Consumer price data due later this week is expected to provide vital clues to the US central bank’s likely decision on rates at the Sept. 14-15 meeting.Supporting gold, meanwhile, the dollar dropped to its lowest against the Japanese yen since February. Bullion generally moves in an inverse pattern to the US currency, with a weaker greenback making gold that’s priced in the currency more competitive for most buyers.Since bouncing from a floor near $4,000 in July, bullion has settled in a relatively narrow range. The metal has swung either side of $4,400 as traders repeatedly reassess the outlook for the Fed’s monetary policy.Despite near-term headwinds, many investors are betting that gold will grind higher as it rediscovers its traditional value as a portfolio hedge. The re-emergence of central-bank buying and the so-called debasement trade is reminiscent of the blistering rally that carried bullion to a record high near $5,600 in January, and some of the world’s biggest money managers have rebuilt their holdings in recent weeks.Spot gold edged up 0.1% to $4,409.68 an ounce at 7:18 a.m. in Singapore. Silver also gained 0.1%, to $66.22 an ounce. Platinum was little changed, while palladium rose. The Bloomberg Dollar Spot Index, a gauge of the US currency, fell marginally after dropping 0.2% on Monday.More stories like this are available on bloomberg.com©2026 Bloomberg L.P.
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