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Gold prices fell to $4,485 during the Asian session as renewed Middle East tensions heightened inflation concerns and strengthened expectations of higher U.S. interest rates. The decline reflects reduced demand for the non-yielding asset amid rising real-yield expectations from potential Federal Reserve rate hikes. Market participants are closely monitoring geopolitical developments in the region and upcoming Fed statements for further direction.
The shift in gold's performance highlights the inverse relationship between precious metals and real interest rates. As investors anticipate tighter monetary policy, capital is likely flowing into USD and other safe-haven assets. This dynamic could pressure gold further in the short term, particularly if inflation data remains stubbornly high.
For traders, the key focus now turns to the Fed's policy trajectory and regional stability indicators. A sustained rise in U.S. rates would likely keep gold under pressure, while any easing of Middle East tensions could provide temporary relief. Technical levels around $4,450 may become critical support to watch in the coming sessions.
