Gold prices slipped in early Asian trading on Monday as the latest tensions in the Middle East added to inflation concerns and reinforced expectations of higher interest rates.

Spot gold fell 0.2% at $4,368.33 per ounce, as of 0027 GMT. US gold futures for December delivery were down 0.4% at $4,406.70.

Yemen's Houthis said they attacked "sensitive" sites in the Saudi capital Riyadh on Saturday with missiles and drones, hours after flames and a large plume of smoke were seen near the city's main airport.

The prospect of a new global interest rate-tightening cycle is coming into view as some of the world's top central banks raise rates and signal more may be needed to tame inflation fuelled by the Iran war.

The Bank of Japan became the latest big central bank to tighten on Friday, following rate increases by the Federal Reserve earlier that week and the European Central Bank the week before.

Though gold is often seen as an inflation hedge, rising rates tend to curb its demand by making interest-bearing assets more attractive.

Euro zone finance ministers are "concerned but not anxious" about the rise of bond yields and realise they must stick to EU-approved fiscal paths to preserve credibility, the head of euro zone finance ministers Kyriakos Pierrakakis said on Friday.

Gold demand in India stayed subdued last week as buyers held back purchases in anticipation of lower prices, while premiums in China remained steady, supported by robust investment demand.

Among other metals, spot silver rose 0.1% to $66.31 per ounce, platinum gained 0.1% to $1,801.20 and palladium added 0.1% at $1,303.70.

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