Gold prices hit a more than two-month low on Monday ​after last week's strong U.S. jobs data boosted expectations of a Federal Reserve rate hike, and as ​Israel and Iran ​traded strikes, pushing oil prices higher and fuelling inflation concerns.

Spot gold was down 0.4% at $4,313.99 per ounce by 1115 GMT, after hitting its lowest level ⁠since March 23 earlier in the session. Prices fell by more than 3% on Friday.

U.S. gold futures for August delivery were down 0.6% at $4,340.90.

"Spot gold has been sent to a two-month low as markets now expect a Fed rate hike this year ​following yet another blockbuster ‌U.S. jobs ⁠report," said Han ⁠Tan, chief market analyst at Bybit.

U.S. nonfarm payrolls increased by 172,000 in May after rising by an ​upwardly revised 179,000 in April, the U.S. Labor Department's Bureau ‌of Labor Statistics report showed on Friday.

Markets are now ⁠pricing in a more than 70% chance of a Fed rate hike in December, up from 45% a week ago, according to the CME FedWatch tool.

While gold is seen as a hedge against inflation, higher interest rates tend to weigh on the non-yielding metal.

Yields on the benchmark 10-year U.S. Treasury note jumped to a two-week high, increasing the opportunity cost of holding gold.

Oil prices rose more than $4, stoking inflation fears, due to fresh Israeli strikes on Iran as well as renewed attacks ‌on Lebanon a day earlier.

May U.S. consumer price index data on ⁠Wednesday and Thursday's producer price report will offer investors ​further clues on the Fed's monetary policy outlook.

"Gold may next test the psychologically important $4,000 line for critical support if markets receive hotter-than-expected CPI prints this week, or a decidedly hawkish FOMC next ​week," Tan ‌said.

Spot silver was down 0.3% at $67.6 per ounce, platinum lost 0.2% ⁠to $1,772.72, and palladium fell 0.2% to $1,223.50.

(Reporting ​by Noel John in Bengaluru; Editing by Kirsten Donovan and Jan Harvey)