Gold Steadies After Hitting Two-and-a-Half-Month Low, Fed Caps Gains

Gold (XAU/USD) edged higher on Monday, recovering some ground after sliding to its lowest level in two and a half months. The move was supported by fresh geopolitical developments in the Middle East, which boosted safe-haven demand.

However, gains remain capped by a hawkish Federal Reserve outlook. Market expectations of higher-for-longer interest rates continue to weigh on the non-yielding metal, preventing a sustained rally.

The yellow metal remains under pressure as traders weigh the balance between geopolitical risks and monetary policy headwinds.