June 8 (Reuters) - 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. FEDWATCH
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
