April 6 (Reuters) - Gold prices edged lower on Monday as investors await further signals on the evolving U.S.-Iran situation ahead of a deadline to reopen the Strait of Hormuz.
Spot gold was down 0.4% at $4,654.99 per ounce by 1:31 p.m. ET (1731 GMT). U.S. gold futures settled 0.1% higher at $4,684.70.
Iran has said it seeks a lasting end to the war with the U.S. and Israel, resisting pressure to swiftly reopen the Strait of Hormuz under a temporary ceasefire as both nations weigh a framework to end their five-week conflict.
President Donald Trump has threatened to rain "hell" on Tehran if no deal is reached by Tuesday.
"Focus is likely to remain on the war and interest rates. If the conflict drags on, oil will grind higher amid tightening supply conditions, adding to inflationary pressures," said Bart Melek, global head of commodity strategy at TD Securities.
"That leaves central banks, particularly the Federal Reserve, with less room to ease policy and could even revive discussions about higher rates if energy prices rise further, which is negative for gold."
Oil prices inched up in choppy trading on Monday, and they have risen sharply since the conflict began.
Gold is widely regarded as a hedge against geopolitical risks and inflation, but because it yields no interest, it tends to be less attractive when interest rates are high.
Other items on investors’ radar include minutes of the Fed’s March policy meeting due on Wednesday, U.S. Personal Consumption Expenditures (PCE) data due on Thursday, and the Consumer Price Index (CPI) on Friday.
The U.S. central bank held rates last month and a majority of traders now see no chance of the Fed cutting interest rates this year, according to CME’s FedWatch tool.
Spot silver fell 0.3% to $72.81 per ounce, platinum lost 0.6% to $1,976.21, and palladium was down 1.1% at $1,487.22.
Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Joe Bavier, Kirsten Donovan and Tasim Zahid
