Gold slides to $4,196 as oil revives inflation concerns

Spot gold slipped 2.06% to $4,196.18 an ounce on Monday, according to Mettis Global, as a rebound in crude oil reignited worries about inflation. Oil climbed over 2% after Donald Trump rejected an Iranian plan for reopening the Strait of Hormuz and stopping the hostilities. Tehran insisted that diplomacy was the only way to settle its standoff with Washington and Israel.

The Federal Reserve lifted its benchmark rate 25 basis points earlier this month, pushing the target band to 3.75%-4%. CME's FedWatch Tool shows markets assigning a 66% chance of another increase in October. Dearer energy typically feeds broader inflation, and since gold pays no yield, higher borrowing costs weigh on it even though it is often seen as a hedge against rising prices.

Attention now shifts to a cluster of American labour and inflation numbers scheduled this week, among them job openings, ADP's employment report, the PCE price gauge and nonfarm payrolls, CNBC reported. Silver fell 2.6% to $62.64 an ounce, while platinum dropped 2.1% to $1,741.45 and palladium shed 2.1% to $1,239.95.