Gold fell on Monday as surging oil prices and signals from Federal Reserve policymakers that further interest rate increases may be needed combined to drag the metal lower.
Spot gold dropped 0.4 percent to $4,000.55 per ounce by 0058 GMT, having touched a two-week low on Friday and shed 2.5 percent over the course of last week. US August gold futures slipped 0.3 percent to $4,005.9 per ounce.
The pressure came partly from oil markets, where Brent crude crossed $90 a barrel, up around three percent, as the conflict between the United States and Iran intensified. The US military announced it had completed a ninth consecutive wave of strikes against Iran, following the deaths of at least two American soldiers in Jordan. US allies in the region reported further Iranian attacks on Sunday.
Higher oil prices feed directly into inflation expectations, which in turn strengthen the case for tighter monetary policy. Several Fed officials have indicated that additional rate rises may be required to contain price pressures, and higher rates tend to weigh on gold by increasing the opportunity cost of holding a non-yielding asset.
Asian equity markets were mixed on Monday as investors looked ahead to a busy week of earnings from major technology companies, seen as a test of confidence in the durability of the artificial intelligence trade.
Among other precious metals, silver gained 0.9 percent to $56.42 per ounce in spot trading, platinum edged up 0.1 percent to $1,592.97, and palladium rose 0.3 percent.
