Spot gold was up 0.1% at $4,717.38 per ounce, as after falling over 1% earlier in the session. U.S. gold futures were little changed at $4,727.80.
“There is just some bargain hunting coming in and positioning ahead of the U.S. inflation data this week,” said Jim Wyckoff, market analyst at American Gold Exchange.
Focus will be on the U.S. Consumer Price Index (CPI) due on Tuesday and the Producer Price Index (PPI) scheduled for release on Wednesday.
On the geopolitical front, President Donald Trump’s swift rejection of Iran’s response to a U.S. peace proposal has fuelled concerns that the 10-week-old conflict will drag on and continue to paralyse shipping through the Strait of Hormuz, pushing oil prices higher. Trump said later on Monday that the ceasefire between the two countries was on “life support.”
Markets are largely focused on expectations around the strait, particularly whether it will reopen, and appear to be digesting the broader scenario of higher energy prices, said Daniel Pavilonis, senior market strategist at RJO Futures.
Global brokerages have scaled back expectations of two U.S. interest rate cuts this year, with forecasts now split between some easing and no cuts at all in 2026 amid inflation risks and cautious policymakers.
Gold tends to come under pressure despite its safe-haven appeal, as higher rates increase the opportunity cost of holding non-yielding assets.
Markets are also watching Trump’s two-day visit to China this week, where he is set to meet Chinese President Xi Jinping to discuss Iran, Taiwan, artificial intelligence and nuclear weapons.