Gold rises from two-week low ahead of US inflation data

Elsewhere, spot silver XAG= rose 0.6% to $57.99 per ounce, after earlier touching a two-week low.

Platinum XPT= lost 0.3% to $1,600.24 and palladium XPD= climbed 1.9% to $1,269.98.

Gold rose on Tuesday after hitting a two-week low earlier in the session, as markets awaited key U.S. inflation data, with escalating U.S.-Iran tensions driving oil prices higher and reinforcing expectations of further Federal Reserve rate hikes.

Spot gold XAU= was up 0.6% at $4,023.77 per ounce by 0747 GMT, after touching its lowest level since July 1 at $3,983.29.

U.S. gold futures GCcv1 for August delivery gained 0.6% at $4,030.30.

Gold shed about 3% in the previous session, its biggest daily percentage decline in more than a month, as continued fighting between the U.S. and Iran drove oil prices to a one-month high. O/R

While gold is often viewed as a hedge against inflation, higher rates tend to weigh on the non-yielding metal by increasing the appeal of interest-bearing assets.

"You have a situation where the markets probably don't want to commit. They have a big batch of event risks in front of them. There's, of course, the Warsh testimony and then the CPI print, so there's a lot for people to look at in addition to the headlines out of the Middle East," said Ilya Spivak, head of global macro at Tastylive.

Investors will closely watch June U.S. CPI data due later in the day for fresh clues on inflation and the Fed's policy path, with PPI data and Fed Chair Kevin Warsh's first semi-annual testimony before Congress this week also in focus.