Gold prices edged lower on Wednesday as investors remained cautious, assessing the economic impact of the Middle East conflict ahead of the U.S. Federal Reserve’s policy decision. Spot gold edged down 0.4% to $4,984.29 per ounce as of 0442 GMT. U.S. gold futures for April delivery fell 0.4% to $4,987.30. Gold’s trajectory “will largely depend on the Fed’s forward-looking guidance … Will the Fed still be looking for one interest rate cut (this year) or will they start to actually pencil in no cut at all due to this very fluid situation in the Middle East,” said Kelvin Wong, a senior market analyst at OANDA. The Fed is widely expected to hold rates steady for a second straight meeting when it announces its policy decision later in the day. Oil prices stayed above $100 a barrel, as Iranian attacks on the United Arab Emirates deepened fears over the global supply outlook. “We may see these oil prices coming down gently, but with that geopolitical risk premium still intact, then that could see some bargain hunting for gold,” said Wong. Gold edges lower as higher energy prices dim rate‑cut hopes The Strait of Hormuz, a conduit for a fifth of the world’s oil shipments, remains largely shut, with Iran threatening to attack tankers linked to the U.S. and Israel. The Strait’s closure kept crude elevated, adding to inflationary pressures by pushing up transport and manufacturing costs. The inflation backdrop supports gold as a hedge, but high interest rates dull the metal’s appeal by boosting returns on yield-bearing assets. Israel’s killing of Ali Larijani, Iran’s security chief and the most senior figure targeted since the first day of the U.S.-Israeli war, has further escalated tensions. A senior Iranian official said the country’s new supreme leader had rejected de-escalation proposals passed on by intermediary nations. Meanwhile, central banks in the UK, the euro zone, Japan, Canada, Switzerland, and Sweden meet this week in their first decisions since the start of the Iran war. Spot silver fell 1.1% to $78.42 per ounce. Spot platinum was down 1.2% at $2,098.20, and palladium lost 1.3% to $1,580.81.