Gold rose as traders waited for U.S. inflation data due later this week for clues on the Federal Reserve's rate path, even as the conflict in the Middle East continued to widen and lift inflation risks. According to Sina Finance, bullion climbed as much as 0.7% to $4,200 an ounce.

Swap traders see a low probability of a rate hike at this month's Federal Reserve meeting, but still think one increase remains possible this year. Brent crude, after rising for three straight days, eased to around $105 a barrel as markets worried the Middle East war could slow supply recovery.

Since the end of February, when the Iran-U.S. conflict broke out, precious metals and crude have largely moved in opposite directions. According to Sina Finance, a report said Wednesday's U.S. consumer price index is expected to be mild enough for the Federal Reserve to keep rates unchanged.

Economists including Anna Wang said this week's producer price index and import price data will show continued pressure from energy and imported goods. Cleveland Fed President Beth Hammack said on Monday that small, frequent policy adjustments can help anchor inflation expectations, but she did not back an October rate hike.

Vantage Global Prime analyst Chen Hebei said gold is currently most sensitive to the chain reaction from oil prices feeding inflation expectations and eventually shaping Federal Reserve policy. She added that high oil prices keep inflation risks elevated, and Wednesday's CPI will be the next key test for whether bond markets have a new reason to push yields higher and keep weighing on gold.