Gold prices extended Friday's losses into Monday's Asian session as hawkish comments from Federal Reserve Chair Kevin Warsh and renewed tensions between the United States and Iran weighed on the non-yielding asset.
By 4:05 pm AEST (6:05 am GMT), spot gold was trading 0.6% lower at US$4,432.24 an ounce.
Gold has faded a temporary recovery in recent hours, with bears maintaining control ahead of a week featuring the U.S. non-farm payrolls (NFP) report, despite the U.S. dollar pulling back from two-week highs.
U.S. military forces struck two Iranian launchers on Larak Island on Sunday, marking the first known American strikes against Iran since late July.
In response, Iran's Islamic Revolutionary Guard Corps (IRGC) launched ballistic missile strikes against two U.S. bases in Jordan and within Iran, according to Iranian media.
Renewed geopolitical tensions pushed oil prices higher and reignited concerns over inflation, strengthening the case for a Federal Reserve rate hike next month and weighing on gold, which does not generate interest income.
On Friday, Warsh indicated for the first time that higher interest rates may be needed to contain inflation.
His comments at the Jackson Hole Symposium were viewed as hawkish, prompting markets to increase bets on a September rate hike.
Markets are now pricing in a 59.7% probability of a September rate increase, up from 41.4% a week earlier, according to the CME Group FedWatch Tool.
