Gold recorded a price drop of almost $2,500 at the beginning of the trading week as a result of high pressure from the recovery of the performance of the United States (US) dollar.
However, the decline is not too significant because it is still receiving support from the potential September interest rate cut by the Federal Reserve (Fed) which is still ongoing.
As of 9.30am, the price of gold was at around $2,503 which is almost unchanged since it opened in early Asian trading on Monday.
The Commerce Department revealed on Friday that the US Personal Consumption Expenditure (PCE) Price Index rose 0.2% in July which was in line with market expectations.
Chief Operating Officer at Allegiance Gold, Alex Abkarian said that the PCE report showed that the rate of inflation was no longer the main concern of the Fed and they began to focus on the unemployment data.
Meanwhile, Israel's largest labor group staged a nationwide strike on Monday, forcing the government to call for a Gaza ceasefire and secure the release of hostages held by Hamas.
For now, investors will closely monitor the development of the conflict in the Middle East.
Any sign of rising tensions in the region could boost demand for safe-haven assets that continue to benefit gold prices.
However, concerns of physical gold demand and a sluggish economy in China may curb the precious metal's gains as the country is the world's top buyer of gold.
