Investing.com– Gold prices fell in Asian trade on Tuesday but remained close to record highs as safe haven demand was buoyed by fears of an Iranian strike against Israel.

Markets also turned risk-off ahead of key U.S. inflation data this week that is likely to factor into the outlook for interest rate cuts.

Gold also remained upbeat on the prospect of U.S. interest rate cuts, with a softer inflation reading widely expected to further this notion.

fell 0.4% to $2,460.78 an ounce, while expiring in December fell 0.1% to $2,501.45 an ounce by 00:56 ET (04:56 GMT). Gold futures hit a record high of $2,517.10 an ounce, while spot prices remained in sight of a record high of $2,483.78 an ounce. 

Iran-Israel fears keep safe haven demand elevated 

Gold benefited from safe haven demand as media reports suggested that Iran could launch an attack against Israel as soon as this week. 

The strike is likely to be in retaliation for the recent killing of a Hamas leader in Iran, and comes as Israel kept up its offensive in Gaza. 

Uncertainty over the scale of the attack, and the threat that it could spark an all-out war in the Middle East, were key drivers of safe haven demand for gold. 

CPI, economic data awaited for more rate cues 

Focus this week was squarely on data from the U.S., due on Wednesday. The reading is expected to show inflation eased slightly in July.

Any more signs of cooling inflation gives the Federal Reserve more impetus to cut interest rates, especially amid growing fears that the U.S. economy is headed for a recession. 

Markets are split over a 25 and 50 basis point cut in September, with Wednesday’s inflation data likely to offer more insight on the potential cut.

Beyond the inflation data, and readings are also set to offer more cues on the world’s biggest economy this week.

Broader precious metal prices fell on Tuesday but were sitting on some gains this week. fell 0.7% to $942.60 an ounce, while fell 0.8% to $27.773 an ounce.

Copper under pressure, more China cues awaited 

Among industrial metals, copper prices fell on Tuesday and remained under pressure from persistent concerns over top importer China.

Benchmark on the London metal exchange fell 0.7% to $8,963.50 a ton, while one-month fell 0.7% to $4.0418 a pound. 

Focus this week is on and data from China, due on Thursday, for economic cues on the world’s biggest copper importer. 

The readings come after a slew of underwhelming data from the country pushed up concerns over its appetite for copper.