Gold Prices Stagnate as Fed Hints at Further Rate Hikes

Gold prices held steady on Tuesday as investors remained cautious ahead of potential policy clues from US Federal Reserve officials. Spot gold was little changed at $4,342.41 per ounce by 0454 GMT, while US gold futures fell 0.1% to $4,379.30.

The appeal of bullion tends to wane in a high-interest-rate environment as investors favor yield-bearing assets. With the Fed raising its policy rate by a quarter of a percentage point last week and hinting at more hikes in the coming months, gold's traditionally inflation-hedging properties are being tested.

Chris Weston, head of research at Pepperstone, noted that investors will focus on comments from Fed officials for signs of whether the central bank is leaning toward another rate increase in October. He added that a reversal higher in crude oil prices could intensify the rates story and put further pressure on gold.