Gold prices fell on Monday after hotter-than-expected U.S. inflation data increased expectations that the Federal Reserve will raise interest rates later this week, while a stronger dollar and surging oil prices added to pressure on bullion. 

By 10:00 ET (14:00 GMT), spot gold had slipped by 1.8% to $4,271.44 an ounce, while gold futures had dropped by 2.2% to $4,311.15 an ounce.

The latest pressure on gold followed August inflation data, which showed firmer-than-anticipated underlying price gains. The increase added to expectations that the Fed could deliver its first rate hike in three years at this week’s meeting.

The U.S. dollar surged to a near two-week high on Monday, as foreign exchange desks aggressively priced in a Federal Reserve interest rate hike this week amid a fresh spike in crude oil and sticky U.S. inflation data. 

The Dollar Index, which tracks the greenback against a basket of six major currencies, rose 0.55% to trade at 99.55, recovering sharply after snapping two consecutive weeks of modest declines.

 Bitcoin moved slightly higher on Monday, steadying after declining last week as markets parsed worsening clashes in the Middle East and mounting expectations that the Federal Reserve will hike interest rates this week. 

Anticipation of a potential vote on the Clarity Act, plus more major central bank meetings beyond the Fed, also kept crypto traders to the sidelines. 

The world’s largest crypto rose 1.4% to $77,959.7 by 09:39 ET (11:39 GMT), after losing some 3% last week. 

Saudi Arabia's crude oil production dropped to its lowest level since 1990 in August, according to data the kingdom reported to OPEC and cited by Bloomberg Thursday. The decline comes as renewed hostilities between the United States and Iran disrupted export routes from the region.

Riyadh informed OPEC's secretariat that its output fell by 1.9 million barrels per day to 6.238 million barrels per day. The figure marks an even sharper decline than the previous low reached in April, which was the lowest production level reported by Saudi Arabia since the start of the Gulf War.