Gold prices edged lower in early trading as inflation concerns persist amid Middle East tensions. Higher oil prices stemming from regional conflict have investors worried about inflationary pressures returning to markets. The precious metal is trading 0.2% lower at $2,759.29 per ounce as traders assess the economic implications.

Tony Sage, CEO of Critical Metals, warned that gold could face additional pressure if oil prices rebound significantly. The executive noted that rising energy costs could reinforce inflation concerns and support expectations for higher interest rates. This combination of factors could reduce gold's traditional appeal as a safe-haven asset during periods of economic uncertainty.

Market participants are closely watching how the interplay between oil prices and inflation expectations will affect precious metals. The current environment presents a challenge for gold investors, as the metal typically performs well during inflationary periods but struggles when higher rates make non-yielding assets less attractive. Traders will be monitoring oil price movements and inflation data for further signals about gold's trajectory.