(Reuters) - Gold prices steadied on Monday as dip-buying helped the market recover from earlier losses, after the metal slipped to a more than one-month low amid rising oil-driven inflation concerns and expectations that interest rates will stay higher for longer.
Spot gold was steady at $4,540.36 per ounce, as of 0241 GMT, after hitting its lowest level since March 30 earlier in the session.
U.S. gold futures for June delivery lost 0.4% to $4,543.70.
"We're seeing a bit of bounce right now due to profit-taking activities, given the fact that gold itself still continues to remain trapped in this complex sideways range configuration," said Kelvin Wong, a senior market analyst at OANDA.
Gold fell to its lowest since March 30 earlier in the session as ongoing tensions in the Middle East boosted oil prices, fuelling concerns around inflation and higher-for-longer interest rates.
A drone strike caused a fire at a nuclear power plant in the United Arab Emirates, officials there said on Sunday.
Saudi Arabia, meanwhile, reported intercepting three drones, as U.S. President Donald Trump warned that Iran must act "fast" after efforts to end the U.S.-Israeli war appeared to have stalled.
Oil prices extended gains on Monday to hit a two-week high.
Elevated oil prices have sparked concerns about inflation. Central banks tend to hike interest rates during periods of inflation, which in turn dims the appeal of non-yielding bullion.
Markets are increasingly pricing in a U.S. Federal Reserve rate hike before year-end, with a 50% chance of a move by December, according to CME Group's FedWatch tool.
Investors now await minutes of the Fed's April meeting, due to be released this week, for clues on the central bank's monetary policy direction.
Meanwhile, India has curbed imports of silver in nearly all forms with immediate effect, according to a government order issued on Saturday, as the world's biggest consumer of the metal seeks to rein in shipments and ease pressure on the rupee.
Spot silver fell 0.8% to $75.38 per ounce, platinum lost 0.1% to $1,972.10, and palladium dropped 1.3% at $1,394.75.