Gold Plunges 2.6 Percent to USD4,170 as Oil Surge Stokes Inflation Fears
Spot gold fell 2.6% to $4,170 an ounce as of 0640GMT on Monday, the first trading day of the week, as selling pressure hit the market from the opening trades.
Oil climbed after reports that US President Donald Trump rejected an offer to reopen the Strait of Hormuz and end the conflict. Brent futures rose 2.6% to $107 a barrel, while WTI gained 1.5% to $94.
Traders fear that expensive energy will keep inflation elevated by raising production and consumption costs, a concern that weighed on bullion alongside elevated US bond yields.
Trump turned down a seven-day ceasefire proposal that Iran delivered through mediators, which would have opened the Strait of Hormuz to shipping. He described the offer as unacceptable.
Investors are now focused on the interest rate path at coming meetings. The Federal Reserve raised its policy rate by 25 basis points this month, to a range of 3.75% to 4%.
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