Oil prices extended gains Monday as Israel and Iran pounded each other with missiles for a fourth day and threatened further attacks, stoking fears of a lengthy conflict that could reignite inflation.

Gold prices also rose back towards a record high thanks to a rush into safe havens, but while most equity markets dropped further into the red the losses were limited on hopes that the conflict does not spread through the Middle East.

Investors were also gearing up for key central bank meetings this week, with a particular eye on the US Federal Reserve and Bank of Japan, as well as talks with Washington aimed at avoiding Donald Trump's sky-high tariffs.

Israel's surprise strike against Iranian military and nuclear sites on Friday -- killing top commanders and scientists -- sent crude prices soaring as much as 13 percent at one point on fears about supplies from the region.

Analysts also warned that the spike could send inflation surging globally again, dealing a blow to long-running efforts by governments and central banks to get it under control and fanning concerns about the impact on already fragile........

© International Business Times