Gold prices slid on Monday after a surprise announcement from OPEC+ about a cut to oil output sparked inflation concerns and raised bets of an interest rate hike at the U.S. Federal Reserve's upcoming May meeting.

Spot gold was down 0.8% at $1,951.37 per ounce, as of 0401 GMT, its lowest in nearly a week. U.S. gold futures shed 0.9% to $1,968.20.

The opportunity cost of holding non-yielding bullion rises when interest rates are increased to lower inflation.

Gold has fallen "as investors weigh up the lure of gold as a safe-haven asset, versus the potential for higher-for-longer interest rates. Clearly, fears of inflation and higher interest rates has won the argument," said Matt Simpson, senior market analyst at City Index.

Oil prices surged after Saudi Arabia and other OPEC+ oil producers announced a round of output cuts, a potentially ominous sign for global inflation just days after a slowdown in U.S. price data had boosted market optimism.

U.S. consumer spending rose moderately in February and showed signs of cooling, even though it remained elevated.

"Gold is now vulnerable to a move down to $1,900, given the potential for a higher terminal Fed rate that markets are currently pricing in," Simpson added.

and made greenback-denominated bullion expensive for overseas buyers.

ANZ, in a note, observed gold's "safe haven demand easing as the U.S. banking turmoil eased."

Bullion had risen by nearly 8% last quarter after the recent global banking turmoil drove bets that the Fed would tone down its rate hike approach.

Standard Chartered analyst Suki Cooper said in a note that gold buying by central banks might not be as strong as it was in 2022.

Spot silver dropped 2.1% to $23.56 per ounce, platinum lost 1% at $981.89, and palladium slipped 0.7% to $1,449.94.