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Gold Volatility Continues as Markets Parse Rate Outlook Amid Middle East Tensions

Gold prices swung between gains and losses as traders weighed competing pressures from geopolitical developments and monetary policy expectations. Elevated energy costs stemming from Middle East tensions have raised inflation concerns, prompting some market participants to bet central banks will maintain higher interest rates longer than previously anticipated. Prospects for a US-Iran ceasefire deal provided temporary relief, with optimism about conflict resolution easing some rate-hike bets. Recent US economic data showing war-driven inflation spikes reinforced expectations that the Federal Reserve may extend its tighter monetary stance. Silver fell to its lowest level in nearly two weeks, reflecting broader precious metals weakness. The conflicting signals—geopolitical uncertainty balanced against hopes for diplomatic resolution—left investors uncertain about the trajectory for both gold prices and interest rates heading into the coming months.