Gold edges lower as dollar holds steady

Gold slips slightly as investors weigh Middle East tensions and growing expectations of higher US interest rates, while the dollar remains steady

Gold prices edged lower during Monday's trading as investors assessed the implications of escalating military tensions in the Middle East, while concerns over potential US interest rate hikes to curb inflation weighed on sentiment.

The US Dollar Index, which tracks the greenback against a basket of six major currencies, was little changed at 100.71.

Cleveland Federal Reserve President Beth Hammack joined a growing number of policymakers calling for higher interest rates to combat inflation, a stance that could lead to divided opinions at the Federal Reserve's next meeting on July 29, Reuters reported.

Markets are now pricing in an 82% probability of a rate hike in December, up from 73% a week earlier, based on the CME FedWatch Tool.

Kelvin Wong, senior market analyst at OANDA, is closely watching the $3,886 per ounce level for gold, noting that a break below this threshold could pave the way for a decline toward $3,500.

*Prices as of 08:23 a.m. Makkah time.