LONDON – Gold edged higher, holding firmly above the key resistance point of US$4,000 an ounce even as the widening conflict in the Middle East fuels expectations for tighter monetary policy.Bullion inched above US$4,060 an ounce, having fallen as much as 0.7 per cent earlier in the session and 2 per cent the day before. Prices are still up on the week.Oil prices retreated on July 24 after hitting US$100 a barrel in the previous session, with the Iran war in a new phase of escalation after the effective collapse of a truce. Crude’s recent rally has stoked inflationary pressures, which alongside a seemingly resilient US labor market increase the possibility of interest-rate hikes. Higher borrowing costs are a headwind for non-yielding bullion.Swap traders currently see a roughly 30 per cent chance the Fed will lift rates at a meeting next week. At least one hike is priced in by the end of the year.“Despite strongly rising oil prices and the resulting renewed concerns about interest rates, the price has held above US$4,000 per troy ounce,” analysts at Commerzbank AG wrote in a note. “Against this background, next week’s meeting of the US Federal Reserve is unlikely to move the gold price much.”Adding to the uncertainty, the US announced it will collect duties of 10 to 12.5 per cent on imports from most major trading partners, alleging forced labor in their supply chains. It is US President Donald Trump’s broadest move yet toward restoring his protectionist tariff regime since his earlier levies were struck down by the Supreme Court.Gold has largely hovered around US$4,000 since late June, which some traders see as a key support level. It’s down by roughly a quarter since the US and Israel launched strikes on Iran in late February, helping to end a multiyear bull run that had carried the metal to a record near US$5,600 the month before.Spot gold edged up 0.3 per cent to US$4,061.27 an ounce as of 12.23pm in London (7.23pm Singapore time). Silver was up 1.4 per cent at US$58.40 an ounce after falling 3.6 per cent in the prior session. Platinum rose 0.6 per cent, while palladium held steady. The Bloomberg Dollar Spot Index was little changed. BLOOMBERG