Gold edges lower near $4,000 as oil and US inflation data lift Fed rate-hike expectations

Gold prices fell and hovered near $4,000 an ounce, according to several market reports. Traders weighed US PCE inflation readings together with oil-supply risks, a combination that revived concerns about possible Fed rate hikes. The sources provide only headlines and short summaries, so the size of the move and the exact inflation figures are not given.

Oil is trading above $100 a barrel. One report put crude at $101.98, 79 cents lower on the session. The Iran war, the blockade and a reported strike on a tanker leaving the Strait of Hormuz keep supply risks in focus. Houthi attacks were also cited as a reason for caution in the oil market.

The mechanism is fairly direct. Costly oil can feed into broader inflation, which makes it harder for the Fed to ease and raises the odds of tightening. Higher expected rates and real yields increase the opportunity cost of holding gold, which pays no interest, and a firmer dollar can add to the pressure.

Gold's decline during the Iran war runs against its usual safe-haven reputation. This suggests that rate expectations are currently outweighing geopolitical demand. Some reports also pointed to Middle East diplomacy as a drag on sentiment.