Gold advanced to a two-month high above $4,400 an ounce ahead of a key US inflation report that could offer fresh clues on the Federal Reserve's appetite for a rate hike, Bloomberg reported. Bullion rose as much as 1% on Tuesday after adding 3.6% over the previous two sessions, with technical buying spurred by the metal's break above its 100-day moving average on Monday. The move added to signs of recovery amid dip-buying in recent weeks and stronger inflows into gold-backed ETFs in China. Vantage Markets analyst Hebe Chen said the pieces around gold are finally moving into place, giving the recovery the shape of an early-stage shift into a new cycle, and that its ability to rise alongside higher oil prices and a stronger dollar suggests traders are pricing it through a different lens.

Attention now turns to Wednesday's US inflation data, with the consumer price index seen rising 0.1% in July after a 0.4% decline the prior month, according to a Bloomberg survey. After Friday's weak jobs report, a moderation in price growth could ease some inflation anxiety at the Fed, though the odds of a hike—negative for non-yielding gold—would build if higher energy prices add pressure. U.S. President Donald Trump made sweeping new demands on Iran on Monday, a hardening stance that dims hopes for a Hormuz deal. Trump also played down his contacts with Fed Chair Kevin Warsh, saying he had spoken with him only once, briefly, since May. Cleveland Fed President Beth Hammack, one of three dissenters last month, said several hikes may be needed to reach the 2% target. Spot gold was last up 0.6% at $4,415.35 an ounce, though bullion remains about 16% below pre-war levels.