Gold inches up on oil pullback; investors monitor Mideast developments

Among other metals, spot silver XAG= rose 1.3% to $58.43 per ounce, platinum XPT= gained 0.2% to $1,602.74, and palladium XPD= inched up 0% to $1,256.95.

July 24 (Reuters) - Gold ticked higher on Friday, reversing earlier declines as oil prices retreated, with investors monitoring developments in the Middle East for fresh cues on energy-driven inflationary risks and the outlook for U.S. interest rates.

Spot gold XAU= rose 0.4% to $4,061.36 per ounce by 1115 GMT, after dropping about 0.6% earlier, while U.S. gold futures for August delivery GCcv1 for August delivery gained 0.3% to $4,063.60.

"Gold has shifted from earlier in negative territory to slightly positive, driven by lower oil prices, reducing pressure on the Fed to adjust its rates," said UBS analyst Giovanni Staunovo.

"Our view remains that the Fed will be on hold and that should be price supportive of gold over the coming months," he added.

Investors are now awaiting the U.S. Federal Reserve's policy meeting next week, when it is largely expected to keep rates unchanged.

Traders are pricing in about an 80% chance of a rate hike in September, according to the CME FedWatch Tool. FEDWATCH

The European Central Bank kept interest rates unchanged as expected on Thursday but held the door open to another increase in September.

Brent crude LCOc1 rose 7% on Thursday, settling above $100 for the first time since May after Yemen's Houthis said they two Saudi oil tankers in the Red Sea.