Gold prices fell by more than 2% during trading on Monday, affected by rising oil prices that heightened inflation concerns and supported expectations of a hike in U.S. interest rates.
The spot gold price dropped by 2.1% to $4,198.10 per ounce by 03:57 GMT, heading for its largest daily decline since September 1, while U.S. gold futures fell by 2.1% to $4,231 per ounce.
The decline in gold coincided with rising oil prices, after U.S. President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz and end hostilities, at a time when Iran emphasized that only diplomacy could resolve the conflict with the U.S. and Israel.
The Federal Reserve had raised interest rates earlier this month by 25 basis points, bringing the target interest rate range to between 3.75% and 4%.
Investors are awaiting a series of U.S. economic data this week, including job openings, the employment report from ADP, and the Personal Consumption Expenditures (PCE) price index, as well as non-farm payroll data.
In other metal markets, the spot silver price fell by 3.4% to $62.08 per ounce, while platinum dropped by 2.7% to $1,730.78 per ounce.