Gold Edges Up Amid Middle East Tensions, Interest Rate Fears

Gold prices climbed on Wednesday as investors weighed the prospect of higher interest rates against escalating Middle East tensions.

The metal added 1% to $4,399.14/oz by 15:58 ET (19:58 GMT), with gold futures ticking up 0.1% to $4,444.20/oz.

The move came as investors digested a combination of elevated oil prices and a slide in Treasury bonds, which has led to concerns about inflation and higher interest rates.

David Morrison, senior market analyst at Trade Nation, noted that gold has shown an inverse correlation to the US dollar since February, but warned that correlations can break down.

The upcoming inflation data releases on Thursday and Friday will be closely watched by investors, with hotter-than-anticipated readings potentially tipping the odds towards a Federal Reserve rate hike next week.