Gold stabilized after posting its steepest weekly decline since June, as market participants assessed persistently elevated energy costs in the run-up to the Federal Reserve's next policy gathering.
Spot gold slipped 0.4% to $4,011.86 an ounce.
Bullion fluctuated around the $4,000 per ounce mark, following a more than 4% slide last week that pushed prices to their lowest level since July. Crude oil retreated from a six-month peak after President Donald Trump told Fox News he was close to deciding whether to strike a deal with Iran or restart attacks. US consumer confidence dropped to a five-month low in October.
Expectations regarding the Fed's rate trajectory have fluctuated over the past month, heightening uncertainty about gold's near-term outlook. Traders initially boosted wagers on an October rate increase following stronger-than-anticipated inflation data, before remarks from central bank officials tempered those projections.
The market is now assigning roughly a 10% probability that the Fed will raise rates at its meeting later this week, though inflationary pressure from high energy prices has fueled bets on a hike before the end of the year. Elevated borrowing costs pose a challenge for gold, which yields no interest.
Gold has shed approximately a quarter of its value since the US-Iran conflict erupted in late February, weighed down by tighter monetary policy as major economies strive to contain inflation. Last week's drop below $4,000 per ounce was also triggered by a shift out of artificial intelligence-related equities into bonds, with gold liquidated as investors sought to offset losses in stocks.