Gold prices opened the week with significant losses of 1.5%, heading lower for the second consecutive session, and are currently trading near the critical level of $4,000 per ounce.

The yellow metal is currently trading at the secondary uptrend line; if it breaks below this level, it could retreat toward the first weekly support level of $4,027. A break below this level would likely extend the decline, with the next support level at $3,934.  

If gold maintains its trading above the secondary uptrend line, it will retest the weekly pivot point at $4,115; a break above this level would be a positive signal that could pave the way for prices to rise toward resistance levels near $4,208 then $4,295.   

In terms of geopolitical tension, U.S. and Iranian forces exchanged heavy missile and drone attacks over the weekend and into Monday, with Tehran striking U.S. facilities across the ‌Gulf and saying it had again closed the Strait of Hormuz, sending oil prices higher.

Iran’s Revolutionary Guards said on Monday they had targeted U.S. military facilities in Bahrain and Kuwait, destroyed radar systems in Oman, and hit fuel tanks and ammunition depots at Prince Hassan Air Base in Jordan in response to U.S. strikes.

The U.S. military said it had struck Iranian air defence systems, coastal radar sites, missile and drone capabilities ​and small boats on Sunday, using aircraft, naval vessels and drones.

The exchanges were an escalation in the pace and geographic scope of attacks over the past week, ​casting doubt on an interim U.S.-Iranian agreement signed last month to reopen the strait and end the war after a further 60 days of ⁠negotiations.

In a brief phone interview with Reuters on Sunday, U.S. President Donald Trump referred to the weekend’s strikes on Iran. “We’re beating them up,” he said.

From a fundamental perspective, investors will be keeping tabs on new inflation data, due out on Tuesday.

The U.S. consumer price index is seen accelerating to 3.9% in the twelve months to May, compared to 4.2% in the prior month. On a monthly basis, CPI is tipped to cool to 0.1%.

Stripping out volatile items like food and fuel, so-called “core” CPI is anticipated to speed up to 0.3% month-on-month.

Finally, markets are awaiting U.S. jobless claims data, with forecasts indicating that 215,000 Americans filed for unemployment benefits, in line with the previous reading.