Oil Surges More Than 3% Amid Rising Middle East Tensions as Gold Hits Seven-Week Low

Oil prices jumped more than 3% in Monday trading as tensions in the Middle East continued to escalate after US President Donald Trump rejected an Iranian proposal aimed at de-escalation and reopening the Strait of Hormuz. Meanwhile, gold prices fell about 3% to their lowest level in more than seven weeks.

By 8:14 a.m. GMT, or 11:14 a.m. Baghdad time, Brent crude futures had risen $3.43, or 3.29%, to $107.75 a barrel. US West Texas Intermediate crude gained $2.14, or 2.32%, to reach $94.55 a barrel.

The rise in oil prices came after Trump rejected an Iranian de-escalation proposal unveiled by Tehran last week during the United Nations General Assembly in New York. Iran said the proposal had been conveyed to the US through Qatari intermediaries. Trump, meanwhile, indicated that he expected further talks between the two sides to take place this week.

In precious metals markets, spot gold fell 3% to $4,156.45 an ounce by 8:14 a.m. GMT, its lowest level since August 5. US gold futures for December delivery also declined 3.1% to $4,188.80 an ounce.

Gold came under pressure as higher oil prices fueled concerns over inflation and increased expectations that US interest rates could remain elevated for longer.

Other precious metals also moved lower. Spot silver dropped 4.8% to $61.17 an ounce, while platinum declined 2.4% to $1,735.88 and palladium fell 2.2% to $1,239.60 an ounce.