Gold prices hit a more than two-month low on Monday after last week's strong US jobs data boosted expectations of a Federal Reserve rate hike, and as Israel and Iran traded strikes, pushing oil prices higher and fuelling inflation concerns, reports Reuters.
Spot gold was down 0.4 per cent at $4,313.99 per ounce by 1115 GMT, after hitting its lowest level since March 23 earlier in the session. Prices fell by more than 3 per cent on Friday.
US gold futures for August delivery were down 0.6 per cent at $4,340.90.
"Spot gold has been sent to a two-month low as markets now expect a Fed rate hike this year following yet another blockbuster US jobs report," said Han Tan, chief market analyst at Bybit.
US nonfarm payrolls increased by 172,000 in May after rising by an upwardly revised 179,000 in April, the US Labor Department's Bureau of Labor Statistics report showed on Friday.
Markets are now pricing in a more than 70 per cent chance of a Fed rate hike in December, up from 45 per cent a week ago, according to the CME FedWatch tool.
While gold is seen as a hedge against inflation, higher interest rates tend to weigh on the non-yielding metal.
Yields on the benchmark 10-year US Treasury note jumped to a two-week high, increasing the opportunity cost of holding gold.
Oil prices rose more than $4, stoking inflation fears, due to fresh Israeli strikes on Iran as well as renewed attacks on Lebanon a day earlier.
May US consumer price index data on Wednesday and Thursday's producer price report will offer investors further clues on the Fed's monetary policy outlook.
