Gold prices inched lower on Monday pressured by a gaining U.S. dollar, but bullion’s losses were cushioned as growing tensions in the Middle East supported the safe-haven near last session’s over two-week highs.

Spot gold was down 0.2% at $2,032.3 per ounce, as of 0405 GMT. U.S. gold futures edged 0.4% lower to $2,041.5 per ounce.

“Gold has exhibited some mild easing to kick-off the new week mostly due to the dollar ticking higher. However, geopolitical concerns have not dissipated, and this is keeping the yellow metal very much on the radar of investors from a safe-haven standpoint,” Tim Waterer, chief market analyst at KCM Trade, said.

The dollar was on the front foot ahead of a packed week filled with key economic releases that will provide further clues on the global interest rate outlook, with a U.S. inflation reading taking centre stage.

“If solid U.S. macro data continues to create hesitation from the Fed regarding when to cut rates, this could create further headwinds for gold as investors may chase yield elsewhere,” Waterer said.

Gold prices fall, silver’s steady

Market participants’ focus is now shifting to the Fed’s preferred inflation indicator, personal consumption expenditure (PCE) data, which is due on Thursday.

Last week, Fed Governor Christopher Waller said he was in “no rush” to cut rates, firming investor bets against U.S. interest rate cuts before June.

Another Fed official sees the U.S. central bank on track to cut interest rates “later this year” despite stronger-than-expected inflation and labour market data in January.

Markets are currently pricing in a 68% chance of a Fed rate cut in June, according to the CME Fed Watch Tool.

Lower interest rates boost the appeal of holding non-yielding bullion.

In other metals, spot platinum was down 0.9% at $892.08 per ounce and palladium fell 0.9% to $962.50. Silver lost 0.5% to $22.79 per ounce.