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Gold prices (XAU/USD) continued their decline below the $4,500 level amid renewed concerns over oil-driven inflation and expectations of potential Federal Reserve rate hikes. The metal extended losses during the Asian session on Wednesday, with sellers capitalizing on the pullback from recent resistance near $4,550. Market participants are closely monitoring the Fed's policy trajectory as higher energy costs threaten to reignite inflationary pressures, potentially prompting tighter monetary conditions.
For traders, the move highlights the inverse relationship between gold and the US dollar, which often strengthens during rate hike cycles. A sustained break below $4,450 could accelerate selling, while a rebound above $4,550 might signal renewed buying interest. The key focus remains on the Fed's upcoming statements and inflation data, which will shape the dollar's direction and gold's technical outlook.
Investors in the Gulf and MENA region should watch for correlations between oil prices and gold, as regional energy markets are highly sensitive to global crude movements. Technical levels at $4,450 and $4,550 will be critical for short-term positioning, with broader implications for portfolio allocations between safe-haven assets and equities.
