Gold prices fell sharply on Monday, extending losses to more than 2%, as a surge in oil prices stoked inflation concerns and strengthened expectations that the US Federal Reserve could keep interest rates higher for longer.Spot gold fell 2.1% to $4,198.10 an ounce as of 9:35 am IST, putting it on track for its biggest single-day decline since September 1. US gold futures also dropped 2.1% to $4,231.00.Oil prices rose more than 1% after US President Donald Trump rejected an Iranian proposal linked to reopening the Strait of Hormuz. Brent crude futures climbed about 2% to $106.50 a barrel.Higher oil prices have renewed concerns about inflation, potentially making it harder for the Federal Reserve to ease monetary policy. The Fed earlier this month raised its policy rate by 25 basis points to a range of 3.75% to 4%.Higher interest rates typically weigh on gold, as the non-yielding asset becomes less attractive compared with interest-bearing investments.“High bond yields and high oil prices continue to weigh on gold,” KCM Trade chief market analyst Tim Waterer said, according to Reuters.Investors are now awaiting key US economic data, including job openings, the ADP employment report, PCE inflation figures and nonfarm payrolls. The data could influence expectations for the Fed’s next policy move.Stock market opens lowerIndian benchmark indices opened lower on Monday as investors remained cautious after the Sensex and Nifty posted their longest weekly losing streak since 2020, amid a rise in oil prices following a stalemate in US-Iran peace talks.The BSE Sensex fell 659.65 points, or 0.89%, to 73,236.09 at 9:20 am, while the Nifty 50 declined 217.50 points, or 0.94%, to 22,923.Fourteen of the 16 major sectors traded lower, while the broader small-cap and mid-cap indices fell about 0.2% each.Other precious metals also declined. Spot silver fell 2.6% to $62.64 an ounce, platinum dropped 2.1% to $1,741.45 and palladium declined 2.1% to $1,239.95.