The famous yellow metal traded modestly higher around $2,470 during the early Asian trading session today (Wednesday).
Its upward momentum may be supported by ongoing tensions in the Middle East and important Consumer Price Index (CPI) inflation data to be published at 8.30pm tonight.
At exactly 9.30 am, the price of gold was at $2,471.15 which is up by 0.24% since it opened at the beginning of trading today.
Gold demand is comfortably at record highs as the Middle East war heats up following news of the US government deploying missile submarines in the region.
The move was made in response to fears of conflict after the recent killings of senior Hezbollah and Hamas leaders.
In addition, the position of the gold price now remains mainly supported by the geopolitical risk of war and the increasing expectations of Federal Reserve (Fed) rate cuts.
On Tuesday, Atlanta Fed President Raphael Bostic said that recent economic data is more convincing that the Fed can drag inflation toward its 2% target.
However, they still need much stronger evidence before they are ready to implement interest rate cuts by the end of the year.
The US CPI inflation report tonight will provide an important indication for the Fed to conduct its latest monetary policy.
The CPI is expected to increase 0.2% monthly for July compared to the previous month which was down 0.1%. On an annual basis, inflation is expected to decrease to 2.9% from 3.0% in June.
The latest softer figures could bolster hopes that the Fed will soon act to cut rates this September.
On the contrary, higher inflation results may reduce the Fed's confidence to implement policy easing. This is likely to put pressure on gold to rise.
