The US Federal Reserve unanimously raised interest rates at its September meeting, marking the first rate hike since 2023. The updated dot plot also indicated that Fed officials anticipate one additional rate increase this year. Fed Chair Kevin Warsh emphasized that bringing inflation under control remains essential for sustainable economic growth, noting that consumer-price pressures have remained elevated for an extended period. Meanwhile, renewed concerns over rising energy prices are adding to the inflation outlook. Escalating tensions in the Middle East have continued to support crude oil prices, raising fears that higher energy costs could keep inflation elevated. This, in turn, has strengthened expectations that the Federal Reserve may maintain its tightening stance for longer. UOB Group analysts have also turned more positive on the US Dollar, arguing that a widening interest-rate gap between the US and other G10 economies could provide further support for the greenback. The bank expects additional Fed rate hikes to reverse some of the recent narrowing in rate differentials and sees upside risks to its USD forecasts against both G10 and Asian currencies. Market expectations are also pointing toward further Fed tightening. According to the CME Group's FedWatch tool, traders are pricing in a 54% probability of another rate hike at the October meeting, while the likelihood of a December move is around 88%. Alongside ongoing geopolitical uncertainty, expectations for higher US rates are supporting demand for the safe-haven US Dollar and could continue to weigh on gold prices. Against this backdrop, traders may prefer to wait for stronger buying momentum before expecting gold's recent recovery from Wednesday's six-week low to extend. Market participants will focus on Friday's US Industrial Production and Capacity Utilization data, as well as speeches from FOMC officials, for fresh clues on the Fed's policy outlook. Further developments in the Middle East could also influence safe-haven demand and create short-term volatility in the XAU/USD pair.