Gold Retreats Amid Dollar Strength and Ongoing Iran Tensions

Gold prices dipped lower on Monday to around $4,350, as the US dollar strengthened and investors took profits after last week's rally. The precious metal had reached its highest level in over a week on Friday due to easing inflation concerns stemming from falling oil prices.

The decline in gold coincided with an extension of oil price drops at the start of this week, with traders watching for diplomatic progress on the Iran conflict ahead of UN meetings. Despite this, tensions remained elevated as Iran and the US exchanged fresh threats over the weekend.

Rate-hike expectations remain high, with a significant 88% probability of a US interest rate increase in December, according to the CME FedWatch Tool. This follows recent moves by major central banks, including the Federal Reserve, Bank of Japan, and European Central Bank, which have all signaled further tightening.