Oil prices retreated on Thursday as markets parsed ongoing uncertainty over supplies from the Gulf region and worries over a weak outlook for crude demand. 

Benchmark Brent oil futures had fallen 2.5% to $86.73 a barrel by 09:10 ET (13:10 GMT), while U.S. West Texas Intermediate crude futures had dropped 2.8% to $80.57 a barrel.   

Gold prices were about 1% higher on Wednesday, after an in-line July consumer inflation report prompted traders to reduce Federal Reserve interest rate hike expectations. Gains were capped by continued uncertainty over a Middle East peace deal to reopen the Strait of Hormuz. 

At 15:12 ET (19:12 GMT), spot gold climbed 1.1% to $4,416.15/oz, while gold futures advanced 0.8% to $4,476.35/oz.

The U.S. dollar on Wednesday bounced back from a session low to tick higher, as ongoing uncertainty over a Middle East peace deal offset an in-line July consumer inflation report that reduced odds of Federal Reserve rate hike expectations. 

The dollar had strengthened in recent sessions as investors raised expectations for tighter monetary policy, but the latest inflation data failed to deliver the upside surprise needed to extend that move.

The yen traded close to 160 per dollar on Tuesday as effects from the U.S.-Japan intervention continued to diminish. The Australian dollar remained near an eight-week high after the Reserve Bank of Australia held interest rates steady.

The Japanese currency stood at 159.1 per dollar, showing slight strength during the day. The yen weakened by 0.9% on Monday, moving further from last week’s three-month high of 155.20 following the rare U.S.-Japan yen-buying intervention at the end of July.