Gold falls to lowest in more than three weeks on stronger dollar and inflation risks

Spot silver XAG= gained 0.1% to $64.35 an ounce while platinum XPT= lost 0.4% to $1,734.06 and palladium XPD= rose 0.6% to $1,319.12.

U.S. Federal Reserve Governor Michael Barr said on Tuesday that it will be time for the central bank to raise interest rates if inflation does not cool quickly, echoing comments last week by Fed Chair Kevin Warsh.

Traders are now pricing in a 68% chance of an interest rate hike at the central bank's policy meeting this month, the CME FedWatch Tool showed.

While gold is typically seen as an inflation hedge, higher interest rates tend to diminish the appeal of the non-yielding metal to investors.

The latest readings on the health of the U.S. economy come with the ADP employment report on Wednesday and non-farm payrolls data on Friday.

Sept 2 (Reuters) - Gold prices fell to their lowest in more than three weeks on Wednesday, pressured by a stronger dollar as the biggest exchange of fire between the U.S. and Iran since July threatened to fuel global inflation.

Spot gold XAU= was little changed at $4,330.79 an ounce by 1155 GMT after hitting its lowest since August 7. U.S. gold futures GCcv1 for December delivery dropped 0.4% to $4,377.90.

"The lingering geopolitical uncertainty pushes oil prices higher, sustaining inflationary risks and pressure on the Fed to raise rates, boosting the dollar and compounding gold's headwinds," said Nikos Tzabouras, a senior market analyst at Jefferies-owned Tradu.com.