Gold Prices Recover Above $4,000 Amid Shifting Inflation Fears

Gold prices recovered to $4,014.49 per ounce on Monday after experiencing their steepest weekly decline in over four months. The metal had previously fallen approximately 4 percent, briefly dipping below the $4,000 mark for the first time since mid-July. This initial slump was triggered by Middle East hostilities that pushed oil prices above $100 a barrel, reviving fears of sticky inflation and a potential December interest rate hike by the Federal Reserve System.

Additional downward pressure on gold came from a firm US dollar, Treasury yields nearing 5 percent, and investors selling bullion to cover losses from a technology stock selloff. However, prices rebounded on Monday as Brent crude futures fell 2 percent to roughly $114 a barrel, easing some immediate inflation concerns.

Market participants are now focused on the Federal Reserve's policy decision this Wednesday and the release of US Personal Consumption Expenditures data on Thursday. While some traders view the $4,000 level as a buying opportunity, upside potential remains limited by expectations that the Federal Reserve, the European Central Bank, and the Bank of Japan may hike rates in December.