Gold falls as Mideast conflict dims easing inflation hopes

Fed Governor Lisa Cook said on Wednesday she is "prepared to act" if inflation does not soon begin to slow. Fed Chairman Kevin Warsh also declared his determination to bring inflation down without hinting at how.

Investors are now looking out for remarks from Dallas Fed President Lorie Logan and Fed Vice Chair Philip Jefferson, due to speak later in the day.

Elsewhere, spot silver XAG= fell 1.7% to $56.78 per ounce. Platinum XPT= eased 1.3% to $1,652.50 and palladium XPD= lost 1.4% to $1,296.29.

Gold fell on Thursday as an escalating Middle East conflict fuelled concerns that the U.S. Federal Reserve could hike interest rates this year, overshadowing recent optimism over easing inflation.

Spot gold XAU= was down 0.9% at $4,024.60 per ounce by 0729 GMT. U.S. gold futures GCcv1 for August delivery lost 0.6% to $4,029.50.

"June's inflation figures did not reflect the impact of the latest escalation in the U.S.-Iran conflict, as the interim peace union reached last month has effectively unravelled," said Jigar Trivedi, a senior research analyst at IndusInd Securities.

The U.S. launched two waves of attacks on Iran's coastal defences and missile sites on Wednesday after reimposing a naval blockade of its ports, while Iran struck back by targeting U.S. military sites in neighbouring countries in what it called an "existential war" with America.

Oil prices have risen 11% so far this week, stoking concerns about inflation and higher-for-longer interest rates. While gold is traditionally seen as an inflation hedge, it loses its appeal in a high interest rate environment.