2024.01.1009:27:00UTC+00Gold Modestly Higher Amid Heightened Geopolitical Tensions

Gold prices were seeing modest gains on Wednesday, showing positive momentum for a second straight session amidst rising geopolitical risks stemming from the Israel-Hamas war and ahead of key U.S. inflation data due this week.

Spot gold rose 0.4 percent to $2,037.54 per ounce, while U.S. gold futures were up half a percent at $2,043.45.

Middle East worries persisted as Israel intensified bombing and ground incursions in central and southern Gaza with dozens killed in overnight attacks.

The dollar traded in a tight range as investors awaited U.S. CPI data on Thursday, which is expected to show a mild pick-up in inflation in December.

Headline inflation likely rose 0.2 percent in the month and by 3.2 percent on an annual basis.

The producer price index, which tracks wholesale prices, will be released on Friday.

Currently, CME's FedWatch Tool shows a 65.7 percent chance for a cut of at least 25 basis points (bps) in March, down from 79 percent week ago.

Elsewhere in Europe, European Central Bank Vice President Luis de Guindos said earlier today in a speech that the euro zone is facing weak growth and a possible recession.

De Guindos said that economic weakness was broad-based, with construction and manufacturing hit particularly hard and services likely to follow in the coming months.

A speech by New York Fed President John Williams will be in focus later today.