Gold slips on bets of higher rates

Gold prices dipped on Wednesday, weighed down by expectations that war-driven inflation will keep interest rates elevated, while investors focused on developments in the Middle East and upcoming economic data, reports Reuters.
Spot gold fell 0.7 per cent to $4,452.09 per ounce by 08:40 a.m. EDT (1240 GMT). US gold futures slipped 0.9 per cent to $4,480.50.
Gulf hostilities flared again as Iranian attacks on Kuwait damaged its airport and injured dozens while the US military carried out strikes near the Strait of Hormuz, with diplomacy to halt the war showing little sign of progress.
"Gold's activity is largely driven by heightened tensions between the United States and Iran," said David Meger, director of metals trading at High Ridge Futures.
"As the conflict intensifies, rising energy prices are expected to lift inflation expectations. This could lead to higher interest rates, further strengthening the dollar and adding additional downward pressure on gold," he added.
Bullion is often seen as a safeguard against inflation, but it tends to become less attractive as a non-yielding asset in a high interest-rate environment.
Oil prices rose, while the US dollar index was up for a third straight session. A stronger US currency makes dollar-priced metals more expensive for holders of other currencies.