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(Bloomberg) -- Gold dipped as a flareup in Middle East hostilities raised inflation risks, even as the Federal Reserve is still expected to keep interest rates steady in the near term.Bullion was trading at around $4,120 an ounce, after rising 0.4% in the previous session to snap three days of declines. Oil rose, after a US Department of State order for non-emergency US government employees and their families to leave Saudi Arabia raised concerns of an escalation, and a drone strike on a Saudi Aramco field left two people dead. Treasuries fell across maturities, lifting yields, with the two-year note at the highest in a week. Elevated borrowing costs are a headwind for gold, which doesn’t pay interest. Bullion has fallen by about a fifth since the US-Iran conflict erupted in late February, pushing energy prices higher and fueling inflation. Traders trying to anticipate the Fed’s next move have had few fresh clues since Chairman Kevin Warsh’s remarks on Friday, which did nothing to dispel expectations it will hold rates steady when it meets next week. Signs of a softening US economy emerged in recent days when data showed September housing starts fell and pending home sales were at a record low. The probability of a quarter-point hike currently sits at less than one-in-six.Still, inflation is well above the central bank’s 2% target, and elevated energy costs increase the possibility it will need to further adjust monetary policy to contain price pressures. Traders are widely expecting an increase at its December meeting. Spot gold fell 0.4% to $4,123.39 an ounce at 7:36 a.m. in Singapore, while silver was 0.7% lower at $57.54. Platinum and palladium also declined. The Bloomberg Dollar Spot Index, a gauge of the US currency, was little changed after edging up 0.1% in the previous session.More stories like this are available on bloomberg.com©2026 Bloomberg L.P.
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