Gold prices drop as inflation fears bolster hawkish Fed bets

Gold prices retreated on Wednesday as investors braced for a potentially hawkish outlook from the United States Federal Reserve. The decline comes amid fears that high energy prices will sustain inflationary pressures, prompting central banks to keep interest rates elevated for a longer period.

Spot Gold fell 0.4% to $4,986.79 per ounce by 0915 GMT, while U.S. gold futures for April delivery slipped 0.3% to $4,990.70. High interest rates typically curb the appeal of bullion as they raise the opportunity cost of holding non-yielding assets while boosting returns on interest-bearing investments.