Sept 8 (Reuters) - Gold inched lower on Tuesday as a rise in oil prices reignited inflation fears, while investors remained cautious ahead of crucial data this week that could offer clues on the Federal Reserve's interest-rate path.
Spot gold fell 0.1% to $4,400.66 per ounce by 1148 GMT, after rising as much as $4,442.70 earlier in the session. U.S. gold futures for December delivery dropped 0.7% to $4,445.20.
"Gold trades cautiously today, caught between Fed rate hike bets and dollar softness. Higher oil prices stoke inflation risks and expectations for Fed rate hikes, putting the precious metal under pressure," said Nikos Tzabouras, a senior market analyst at Jefferies-owned Tradu.com.
On the geopolitical front, Yemen's Tehran-backed Houthis attacked energy facilities and cities in U.S. ally Saudi Arabia on Tuesday. Oil prices extended gains to multi-weeks highs.
Spot gold fell as much as 2.4% on Friday after data showed that U.S. job growth accelerated sharply in August, while the unemployment rate held steady at 4.1%, suggesting an improvement in the labor market.
Traders are now pricing in about a 61% chance of an interest rate hike at the central bank's policy meeting, according to the CME FedWatch Tool, up from about 50% before the data.
Although gold is typically seen as an inflation hedge, higher interest rates tend to diminish non-yielding bullion's appeal.
The U.S. dollar index softened, making greenback-priced bullion more affordable for buyers overseas.
Investors now await U.S. producer price index data on Thursday and the consumer price index data on Friday for further clues on the Fed's monetary policy stance.
"The precious metal may struggle for firm direction from any inconclusive prints, given fluid market pricing and a Fed that lacks conviction,” Tzabouras said.
Among other metals, silver edged 0.2% lower to $66.03 per ounce, platinum rose 0.1% to $1,828.50 and palladium slid 1.4% to $1,368.80.
Reporting by Sukanya Mitra in Bengaluru; Editing by Mrigank Dhaniwala, Ronojoy Mazumdar and Diti Pujara
