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Gold prices (XAU/USD) fell to $5,150 during Asian trading hours on Thursday, marking the second consecutive session of losses. The decline follows rising oil prices, which have heightened inflationary pressures and diminished market expectations for Federal Reserve (Fed) rate cuts. Analysts note that stronger-than-anticipated energy costs are undermining the case for monetary easing, which typically supports gold as an inflation hedge. The dollar's resilience against major currencies has also weighed on bullion demand. For traders, this development signals a shift in market dynamics. A delayed Fed rate cut cycle reduces gold's appeal as a safe-haven asset, while higher energy costs directly impact manufacturing and consumer spending. The interplay between oil prices and central bank policy will remain critical for gold's trajectory. Investors should monitor upcoming Fed speeches and inflation data for clues on policy direction. Looking ahead, the U.S. inflation report due next week and the Fed's policy outlook will be key drivers. For Gulf investors, the correlation between oil prices and regional economic stability adds urgency to tracking energy markets. A sustained dollar rally or unexpected inflation moderation could reverse the current bearish trend.
