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

Spot gold was down 0.8 per cent at $4,029.29 per ounce by 0518 GMT. US gold futures for August delivery lost 0.4pc to $4,034.40.

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