Oct 14 (Reuters) - Gold edged lower for a third straight session on Wednesday as oil prices climbed, while investors turned their attention to incoming US inflation data for clues on the Federal Reserve's next policy move.
Spot gold dipped 0.4% to $4,140.33 per ounce by 1121 GMT. U.S. gold futures for December delivery fell 0.3% to $4,162.80 per ounce.
"I think for a large part, a lot of traders are sitting on their hands ahead of the release of the CPI data later today, which could impact the direction of the US dollar, gold prices and everything else really pricing the dollar," said Fawad Razaqzada, market analyst at Forex.com.
The US Consumer Price Index (CPI) report is due at 1230 GMT, followed by the Producer Price Index (PPI) and retail sales data on Thursday.
Oil prices climbed on Wednesday after two vessels were struck in the Strait of Hormuz, and Iranian officials told Reuters they were deploying new tactics to target ships, as Tehran seeks to keep oil prices high and influence the US midterm elections.
"Once the US dollar pops out, we are very close to seeing the dollar potentially topping out. That's when gold is going to shine more brightly. I reckon that the metal could rise back towards the 4,500 area, 4,700 even in the later months of the year," Razaqzada added.
While gold is typically seen as a hedge against inflation, higher interest rates tend to diminish the appeal of non-yielding bullion.
New York Fed President John Williams reaffirmed his view that the US central bank may need to raise rates once more this year in its bid to lower inflation.
Markets see about a 22% chance of a US rate hike this month and a 90% probability of an increase in December, according to CME's FedWatch Tool., opens new tab
Among other metals, spot silver fell 1.5% to $58.57 per ounce, platinum dipped 0.6% to $1,653.18 per ounce and palladium gained 0.6% at $1,132.70 per ounce.
Reporting by Vishak Mathew in Bengaluru; Editing by Vijay Kishore
