09:29 AM EDT, 03/09/2026 (MT Newswires) -- Gold traded lower early Monday as traders move away from the traditional safe haven in favor of the U.S, dollar as inflation fears rise on surging oil prices, even as global stock markets continue to weaken as the U.S-Israeli war on Iran enters its second week.

Gold for April delivery was last seen down $39.70 to US$5,119.00 per ounce.

The drop comes as markets continue to be roiled by the impact of the war, which has blocked about a fifth of the world's oil daily demand from Persian Gulf producers as tankers are unable to transit the Strait of Hormuz. Oil prices rose above US$100 per barrel on Monday for the first time since mid-2022, raising inflation worries.

The market has shown little interest in bidding up gold despite the market turmoil, with the precious metal remaining well below its Jan. 29 record high as oil's surge spark worries of higher interest rates, bearish for gold since it pays no interest.

"The energy-price shock is having knock-on effects on the prices of other commodities. That's relevant insofar as central bankers will recall that a general burst of commodity price inflation led the consumer inflation burst in 2022. They are thus likely to pay close attention to commodity prices as leading indicators of measures of consumer price inflation....Rising inflation breakevens now are giving central bankers another reference point for adopting a more hawkish disposition," Thierry Wizman, Global FX & Rates Strategist at Macquarie Group, wrote.

The dollar continued to rise, with the ICE dollar index last seen up 0.37 points to 99.36, the highest since Jan.19. Treasury yields rose, with the U.S. two-year note last seen up 4.6 basis points to 3.604%, while the 10-year note was paying 4.169%, up 3.6 points.