Gold Prices Slip Amid Middle East Uncertainty and Inflation Fears

Gold prices edged lower on Monday due to uncertainty over the ongoing Middle East conflict and concerns about rising inflation. The US Federal Reserve's policy path is also being closely watched, with markets anticipating a slew of job reports this week.

Sport gold fell by 0.1% to $4,037.01 per ounce, while US gold futures for August delivery dropped 0.3% to $4,035.80. Analysts believe that the market's expectation of a resurgence in inflation is supporting gold prices around the current trading range of $4,000-$4,200.

Marex analyst Edward Meir stated that the market could be expecting a resurgence in inflation, particularly in July when fresh data will likely reverse much of June's decline. Three Fed officials who dissented at last week's policy meeting in favor of a rate hike emphasized the need for higher borrowing costs to combat inflation.

The uncertainty over the Middle East conflict is also contributing to the gold price drop, with Brent futures jumping more than 20% last month after fighting between the US and Iran resumed. New York Fed President John Williams stated that the central bank was ready to raise rates if inflation pressures did not ease.