- Spot gold rose 2% on Wednesday
- U.S. launches fresh strikes on Iran
- June U.S. PCE data due at 1230 GMT
July 30 (Reuters) - Gold prices held steady on Thursday as investors assessed the Federal Reserve's decision to keep interest rates unchanged this month and rising tensions in the Middle East that have heightened inflation concerns, clouding the policy outlook.
Spot gold was little changed at $4,062.30 per ounce by 0841 GMT.
U.S. gold futures for August delivery rose 0.7% to $4,060.60.
The Fed on Wednesday left its benchmark rate in the 3.50%-3.75% range, while U.S. central bank chief Kevin Warsh pledged an unwavering commitment to bring inflation down. Spot gold prices rose about 2% after the policy decision.
Meanwhile, the U.S. military said it struck dozens of Islamic Revolutionary Guard Corps targets in Iran, in retaliation to Tehran firing ballistic missiles at U.S. troops in Jordan on Wednesday.
Brent crude prices climbed more than $1 a barrel on Thursday.
Higher oil prices keep the market expecting the Fed's next move to be a rise in policy rates, which is not helping gold, said UBS analyst, Giovanni Staunovo.
"To see gold rising, we need an improvement in investment demand and that requires market participants to shift expectations towards rate cuts," Staunovo added.
Despite being known as an inflation hedge, higher-for-longer rates tend to diminish bullion's appeal due to its non-yielding characteristic.
Traders are pricing in about a 65% chance of a rate hike at the Fed's September meeting, according to the CME FedWatch Tool. FEDWATCH
Investors now await June U.S. Personal Consumption Expenditures (PCE) data, due at 1230 GMT.
Elsewhere, India has seen a rise in unofficial gold inflows since the government raised import tariffs on the precious metal earlier this year, the World Gold Council said.
Among other metals, spot silver slipped 0.03% to $57.62 per ounce, platinum dropped 0.4% to $1,605.20, and palladium rose 1.8% to $1,268.56.
Reporting by Sukanya Mitra in Bengaluru; Editing by Ronojoy Mazumdar
Source: Reuters