Gold prices continued to trade lower, below $4,100 at the start of the week as markets focused on the escalating tensions between the United States and Iran, in addition to awaiting US inflation data this week.
At 9.10 am, gold prices were trading at $4,079, down 1% since they opened early Monday in Asian trading.
The US military reportedly launched another series of strikes on Iran on Sunday to weaken Tehran's ability to attack ships passing through the Strait of Hormuz.
The attacks are seen as Washington's efforts to protect oil trade routes that are vital to the world's energy supply.
The ongoing conflict has raised concerns about rising oil prices and global inflation. This situation has reinforced expectations that the Federal Reserve (Fed) will keep interest rates at high levels for an extended period.
While gold is often a favorite of investors during times of heightened geopolitical uncertainty, expectations of higher interest rates continue to limit the precious metal's gains as it does not offer a return in the form of interest.
Market attention now turns to the US Consumer Price Index (CPI) data for June due on Tuesday. Analysts expect headline inflation to fall 0.1% from the previous month, while core inflation is expected to rise 0.3%.
If inflation data is lower than expected, pressure on the US dollar is likely to ease and this could provide support to gold prices and other commodities traded in US dollars in the near term.
