Gold prices steadied near a three-month low as elevated oil prices weighed on the precious metal, while market participants turned their attention to the upcoming Federal Reserve meeting.
Rising energy costs tend to feed into broader inflation expectations, and when those expectations strengthen, markets often anticipate that central banks will keep borrowing costs higher for longer. Gold pays no interest, so higher rate expectations usually make it less attractive to hold, even though the metal is also widely used as a hedge against inflation and economic uncertainty. That tension is one reason gold can struggle when oil climbs.
Traders are now focused on the Federal Reserve's next policy decision. Any signal about the future path of interest rates is likely to shape gold's direction in the coming sessions, as investors weigh whether the central bank will hold a restrictive stance or change course in response to price pressures.
Without a clear catalyst for a rebound, gold has been trading in a cautious range, and market watchers are monitoring both energy prices and the Fed's messaging for signs of a shift in sentiment.