- Spot gold sheds over 1%
- Brent crude futures set for record daily jump
- Iran names Khamenei's son Mojtaba as new supreme leader
March 9 (Reuters) - Gold fell on Monday as the U.S.-Israeli war on Iran fuelled inflation concerns, which dimmed near-term U.S. interest rate cut prospects and boosted the dollar.
Spot gold was down 1.2% at $5,109.39 per ounce as of 1012 GMT, after falling more than 2% earlier. U.S. gold futures for April delivery lost 0.8% to $5,118.20.
"Historically, it is not uncommon to see gold falling as first reaction when financial markets show stress signs as gold is a highly liquid asset," said UBS analyst Giovanni Staunovo.
Stock markets in Asia nosedived as the inflationary jolt from surging oil prices threatened to raise living costs and interest rates across the globe, while investors desperate for liquidity fled to the U.S. dollar, propelling it to a more than three-month high.
The dollar index was up near three-month highs. A stronger greenback makes bullion more expensive for holders of other currencies.
"Market participants are translating higher oil prices in rising inflation and central banks turning more hawkish," Staunovo added.
Oil prices rose more than 15% to levels not seen since mid-2022 as some major producers cut supplies and fears of prolonged shipping disruptions gripped the market.
Meanwhile, Iran on Monday named Mojtaba Khamenei to succeed his slain father Ali Khamenei as supreme leader.
Investors are increasingly expecting the U.S. Federal Reserve to hold rates steady at its two-day meeting on March 18.
The odds of a June hold, which were below 43% last week - when the war began, climbed to more than 51%, per CME Group's FedWatch tool. FEDWATCH
U.S. 10-year Treasury yields climbed to a one-month high, further raising the cost of holding non-interest yielding gold.
Spot silver was down 0.3% at $84.07 per ounce, after losing over 5% earlier in the session. Spot platinum lost 1% to $2,113.97 and palladium fell 1.3% to $1,604.09.
Reporting by Ishaan Arora in Bengaluru; Editing by Harikrishnan Nair and Varun H K
Source: Reuters