Gold drops 2% as oil surge fuels US rate hike bets
Gold prices fell more than 2% on Monday, dropping to $4,198.10 an ounce, as a surge in oil prices fueled inflation concerns and boosted expectations that the US Federal Reserve will keep interest rates higher for longer. Oil climbed about 2% to $106.50 a barrel after US President Donald Trump rejected an Iranian proposal linked to reopening the Strait of Hormuz. Higher rates typically weigh on gold, making the non-yielding asset less attractive compared with interest-bearing investments. Investors are awaiting key US economic data, including job openings, ADP employment, PCE inflation and nonfarm payrolls. Indian stock indices also opened lower, with the Sensex falling 0.89% and Nifty 0.94%, while silver dropped 2.6% to $62.64 an ounce.