Gold fell more than one percent in early Asian trade on Monday, as fears of a closure of the Strait of Hormuz led to a sharp rise in oil prices, reviving expectations of interest rate hikes to combat inflationary pressures.

Spot gold fell 1.2 percent to $4,072.78 per ounce by 0050 GMT. U.S. gold futures for August delivery fell 0.8 percent to $4,081.70.

Oil prices jumped about four percent, the dollar rose, and Asian stock markets fell as fighting intensified in the Gulf region.