Gold Edges Lower as Energy-Driven Inflation Fears Sustain Fed Rate Hike Bets

Gold (XAU/USD) edged lower on Thursday, reversing earlier gains as market participants looked past two consecutive softer-than-expected US inflation reports. Instead, attention shifted to renewed Middle East tensions, which are fueling concerns that elevated energy costs could rekindle inflationary pressures.

These inflation fears are keeping expectations of further Federal Reserve rate hikes in play, supporting the US dollar and weighing on the non-yielding precious metal. The safe-haven bid from geopolitical risks has been insufficient to lift gold amid the prevailing hawkish monetary policy outlook.