Gold prices were choppy on Monday, as investors kept tabs on a sell-off in global bonds driven by fears over accelerating inflation and higher interest rates.

By 07:24 ET (11:24 GMT), spot gold had dipped by 0.1% to $4,536.03 an ounce, while gold futures had dropped by 0.5% to $4,539.59 an ounce.

The price of the yellow metal had edged higher earlier in the session, after having slumped to its lowest level since March 30.

Bullion has retreated compared to its level at the start of the Iran war in late February, as traders flocked to the U.S. dollar as a safe-haven asset, buoyed by the view that the American economy -- as a major energy exporter -- may be insulated from an energy shock sparked by the conflict. A stronger dollar can make gold more expensive for overseas buyers.

At the same time, worries over a surge in inflationary pressures due to the war have also dented gold’s appeal. Central banks can react to faster price gains by raising interest rates, which can make non-yielding assets like gold less appealing.

Over the weekend, a drone attack caused a fire at a nuclear facility in the United Arab Emirates, while Saudi Arabia said it had intercepted three drones.

The developments cast fresh doubt around a fragile ceasefire between Washington and Tehran, with President Donald Trump writing on social media that "the clock is ticking" for Iran to reach a peace agreement or face potential renewed military action from the United States.

Some investors were hopeful last week that Trump may be able to forge a breakthrough in the impasse with Iran during a visit to China, a key importer of Iranian oil. However, the summit did not yield any immediate commitments from Beijing.

"The weekend [...] saw a return of concerns over the ongoing war between the U.S. and Iran," said David Morrison, Senior market Analyst at Trade Nation, in a note.

"These fell out of focus while the Trump administration was in Beijing. But they bounced back into sight as it became painfully apparent that the Chinese trip was a non-event, while Iran appears in no mood to accede to the U.S. peace plan."