Gold starts week with sharp decline as oil, interest rate pressures strengthen

Gold prices started the week with a sharp decline as rising oil prices increase inflation concerns and expectations for the Fed interest rate policies tighten.

Selling pressure stood out in the first transactions of the new week in the gold market; an ounce of gold retreated to $4,170 per ounce with a 2.6% loss on the first trading day of the week, as of 0640GMT.

Oil prices rose following reports that US President Donald Trump rejected an offer to reopen the Strait of Hormuz and end the conflicts.

Brent futures are traded for $107 per barrel, up 2.6%, while WTI is at $94, up 1.5%

Expectations that high energy prices could keep inflationary pressures elevated by increasing production and consumption costs put pressure on gold, along with high US bond yields.

Trump rejected a seven-day cease-fire offer made by Iran through mediators to open the Strait of Hormuz to shipping traffic, adding that Iran's offer was unacceptable.

Investors shifted their focus to the interest rate path in upcoming meetings after the Fed increased the policy rate by 25 basis points to the 3.75% to 4% range at its meeting this month.