Spot gold advanced to around $3,364 an ounce on Tuesday morning, rising about 1.1%, while U.S. gold futures fell 0.5%, according to CNBC's conversion of the spot-to-futures ratio.
Gold has seen several intraday updates on Tuesday, which may account for minor discrepancies between spot and futures moves across the day's snapshots. Spot price gains were reported at roughly 0.4% to 1.1% depending on the update cycle.
The rally unfolds against three key catalysts.
First, the dollar retreated. The ICE Dollar Index fell to around 98.37, snapping a four-session winning streak that had pushed the benchmark above its 50-day moving average.
Second, markets are positioning ahead of Thursday's consumer-price index reading for August. Economists surveyed by Bloomberg forecast core PCE inflation at 2.7% year over year — the most since last November — with headline CPI expected to rise 3.1%, also the highest pace since last November. Markets are weighing whether the Federal Reserve will proceed with two more rate cuts this year, or scale back to just one.
Third, geopolitical concerns are adding a bid for the metal. A ceasefire between Iran and Israel appeared to be fraying, with the Pentagon saying it was preparing contingencies for renewed Iranian nuclear activity. Iran's supreme leader warned on Tuesday that Israel might attack Iran again soon, saying there are "conditions" that could prompt such a move.
On Wednesday, the Federal Reserve will hold a second day of its policy meeting. A majority of officials surveyed by Bloomberg see the fed funds rate ending the meeting cycle between 3.5% and 3.75%. Traders have priced a 99.2% probability of a 25-basis-point cut and a 36.9% chance of a 50-bp cut.
