Gold edged lower as investors waited on the Federal Reserve's next move, with inflation data due and the central bank's policy meeting just ahead. The Fed raised rates last month, and markets now see little chance of a change at the upcoming meeting but a strong chance of another hike later in the year. That matters for bullion, which pays no interest and tends to struggle when rates rise because holding it costs investors the income they could earn elsewhere. Silver and palladium slipped along with gold, while platinum held steady. Overseas, a central banker's remarks about firming inflation pressure from AI demand and tight job markets added to the sense that rates may stay higher for longer. Geopolitical tension in the Middle East continues to simmer in the background, keeping safe haven demand alive even as higher rates take some shine off the metal.

Finsum: Gold is pulled by two forces at once, fear and interest rates, and investors who hold it for diversification should expect bumpy stretches whenever the Fed turns hawkish.