Gold prices fell by 0.5% to $3,351.59 per ounce following warnings from the U.S. Federal Reserve regarding inflation and potential slower rate cuts. The Fed's decision to maintain interest rates without changes and its indication of only two possible rate cuts by the end of the year have diminished gold's appeal as a safe-haven asset, especially in light of rising geopolitical tensions in the Middle East. The market reacted negatively, with gold futures trading near $3,350, reflecting a 0.6% drop during trading hours.

Despite the decline, gold remains supported. The Fed's new economic forecasts, which predict slower growth and rising inflation, could further complicate the outlook for gold. Additionally, strong purchases from central banks and inflows into exchange-traded funds have contributed to a 30% increase in gold prices since the beginning of the year, indicating a complex interplay between economic indicators and geopolitical factors.