On Wednesday, spot gold edged lower during Asian trading, continuing the weak performance from the previous session. Despite escalating geopolitical tensions in the Middle East, the market did not rush to gold as a traditional safe haven. Instead, prices came under pressure due to inflation concerns sparked by surging oil prices and strengthening expectations for Federal Reserve interest rate hikes.

Following a new round of U.S. strikes on Iran and attacks on oil tankers in the Strait of Hormuz, energy supply risks have surged sharply. WTI crude oil surged over 5% intraday, returning above $72. The rapid rise in energy prices has reignited market fears about inflation, which in turn has boosted expectations for interest rates to remain elevated. Market data shows that bets on a September rate hike have increased to over 63%, up from 57% just a day earlier.

Gold's status as a non-yielding asset has become a clear disadvantage in the current environment. Geopolitical concerns first push up oil prices, which then transmit to inflation expectations, ultimately translating into pressure for tighter Fed policy. By this point, gold's safe-haven appeal is being offset by the pressure from higher interest rates. The 10-year U.S. Treasury yield climbed to 4.567%, exerting direct downward pressure on the gold price.

Market focus is now shifting to the upcoming release of the Federal Reserve's June meeting minutes. These minutes will provide the first detailed look at policy discussions under the new Chair Wash. If the minutes convey deep concerns about inflation, rate hike expectations could strengthen further, pushing the U.S. dollar and bond yields higher and continuing to weigh on gold. Conversely, if more weight is given to signs of a slowing labor market, gold may find an opportunity to recover.

From a technical perspective, gold is currently battling around the $4,100 level, with the $4,180 to $4,200 zone forming a key short-term resistance area. The price remains within a downward channel, and any short-term rebound appears more like a technical correction rather than a trend reversal. Important support lies near $3,844. If the current level is breached, gold may seek support further down.