Gold Prices Near Seven-Week Low Amid Fed Rate Hike Concerns

Gold prices hovered near a seven-week low on Tuesday as investors remained cautious about potential further interest rate hikes by the Federal Reserve. Spot gold was little changed at $4,123.29 per ounce, while US gold futures fell 0.3% to $4,155.50.

The Fed's decision is influenced by concerns over inflation, which can be fueled by elevated oil prices. The price of oil rose for a second consecutive session amid lingering worries about supply disruptions in the Middle East.

Despite its reputation as an inflation hedge, gold tends to struggle in high-rate environments as investors favor assets that generate yield. Market participants currently see a 70.3% probability of a Fed rate hike in October, according to CME's FedWatch Tool.