(Bloomberg) -- Gold traded in a narrow range, hovering around $5,000 an ounce as the conflict in the Middle East entered a third week and investors weighed the inflationary impact of higher oil prices.

Bullion slid as much as 1% on Monday, following two consecutive weeks of losses. Elevated crude prices from the US-Israel war with Iran have put the metal under pressure, raising the prospect of fewer Federal Reserve interest rate cuts. Crude fell in choppy trading, with Brent settling around $100 a barrel.

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Uncertainty over how long the war will last has made it difficult for traders to assess the impact on markets and the wider economy. A top aide to US President Donald Trump said the conflict could last four to six weeks, while both sides have given mixed signals.

Over the weekend, Iran launched fresh attacks across the Persian Gulf, disrupting shipments at a key United Arab Emirates oil hub and denying US President Donald Trump’s assertion that it’s seeking ceasefire talks. Shipping remains near a standstill in the Strait of Hormuz, the strategic waterway through which a fifth of the world’s oil and liquefied natural gas typically moves.

As the war drags on, prospects for an interest-rate cut have dwindled. Traders now see virtually no chance of a rate cut at this week’s Fed meeting. Higher borrowing costs typically weigh on precious metals, which don’t pay interest.

The war has also boosted the dollar at the expense of gold. Though slightly down Monday, the greenback has risen about 2% since the US and Israel first struck Iran.

“The dollar has been the ultimate safe haven during this conflict,” said Daniel Ghali, senior commodity strategist at Toronto Dominion Bank. “That is detrimental to gold since over the last year, gold has been the ultimate safe haven.”

Though upward momentum has stalled, the yellow metal has still gained more than 15% this year. Concerns over stagflation — a combination of slower growth and high inflation — may push investors toward gold as a better store of value over the longer term.

“Gold is more of a hedge against the wider impact of conflicts, rather than direct wartime threats,”UBS Global Wealth Management wrote in a note Monday. While higher energy prices and inflation have weighed on the metal, “gold primarily insulates against monetary risks like currency devaluation, rising deficits, and economic slowdowns, which can result from geopolitical conflicts,” the analysts wrote.

Spot gold fell  to $ an ounce as of  in New York. Silver gained  to $ an ounce. Platinum and palladium both rose. The Bloomberg Dollar Spot Index declined  after adding more than 1% last week.

--With assistance from Yihui Xie and Preeti Soni.

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