July 21 (Reuters) - Gold rose on Tuesday as oil prices softened on signs of diplomatic efforts to ease the U.S.-Iran conflict, with investors also weighing the risk of another crude price spike after Yemen's Houthis threatened to impose a naval blockade on Saudi Arabia.
Spot gold XAU= rose 0.5% to $4,023.56 per ounce, as of 0146 GMT. U.S. gold futures for August delivery added 0.3% at $4,028.
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Oil prices softened on Tuesday, with markets weighing reports of mediation efforts between the U.S. and Iran against an exchange of fresh attacks between the two and threats of a naval blockade of Saudi Arabia by Yemen's Houthis.
A successful effort by Houthis to shut the Bab el-Mandeb Strait would strike at one of the world's most important oil shipping routes, potentially triggering a fresh surge in crude prices, disrupting fuel supplies and adding to strains on the global economy.
The Houthis made their announcement despite signs that Tehran and Washington want to resume diplomacy to halt a worsening cycle of attacks that has all but wrecked a fragile interim agreement signed last month.
Iran's Foreign Ministry said mediators had presented "proposals" to Tehran, signalling that diplomatic contacts remain active, but gave no details.
The recent escalation in Middle East conflict lifted oil prices to more than a one-month high on Monday, with a growing chorus of policymakers arguing interest rates may need to rise to beat back persistent inflation, setting up a charged debate at the Federal Reserve's next meeting.
High interest rates increase the opportunity cost of holding the non-yielding bullion.
Russia's gold reserves stood at 73.4 million troy ounces, or 2,282 metric tons, as of the start of July, according to the central bank on Monday, marking a decrease of 1.4 million ounces, or 43.5 metric tons, since the start of the year.
Elsewhere, spot silver XAG= gained 0.9% to $56.93 per ounce, platinum XPT= was down 0.2% at $1,591.22 and palladium XPD= rose 0.3% to $1,256.68.
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