(Updates after market close)

* Fed's Kashkari calls for focus on inflation risk

* Investors focusing on key US data due later this week

* BofA says gold rally could boost silver above $100 per

ounce again

By Anjana Anil and Anmol Choubey

May 27 (Reuters) - Gold prices fell to a two-month low

on Wednesday, pressured by expectations of tighter monetary

policy to fend off rising inflation, with no clear end in sight

to the U.S.-backed war with Iran.

Spot gold was down 1.3% at $4,447.71 per ounce as of 2:08

p.m. EDT (1808 GMT), after falling to its lowest level since

March 27 earlier in the session. U.S. gold futures for

June delivery settled 1.2% lower at$4,448.40.

"The biggest influence continues to be the Middle East.

There was some lingering optimism, but as this continues to drag

out, that optimism wanes," said Peter Grant, vice president and

senior metals strategist at Zaner Metals, adding that the

ongoing conflict was heightening inflation concerns.

Bullion has been under pressure since the start of the

U.S.-Israeli war with Iran. The effective closure of the Strait

of Hormuz has prompted a surge in Brent crude prices, fanning

inflation woes and propelling expectations of rate hikes.

Tehran will restore shipping through the strait to pre-war

levels within a month in a framework deal with the U.S. that

also includes the withdrawal of U.S. forces from Iran's

vicinity, Iranian state television reported on Wednesday. Gold

prices briefly pared some losses after this report.

However, the market still sees energy-driven inflation

prompting the U.S. Federal Reserve to hike its benchmark

overnight interest rate by 25 basis points by the end of this

year. Despite being an inflation hedge, non-yielding gold

struggles in high rate environments.

Separately, Minneapolis Fed President Neel Kashkari said the

U.S. central bank must focus on containing inflationary risks

that appear to be building, though it was "far too soon" to

predict when it could change its current policy rate.

Investors await the release on Thursday of U.S. Personal

Consumption Expenditures data for clues on the monetary policy

path.

Spot silver fell 3.2% to $74.46 per ounce.

"While a rally in gold could once again boost silver above

$100/oz in the coming months, we do not see silver outpacing on

a sustained basis due to easing fundamental demand," Bank of

America wrote in a note on Tuesday.

Platinum slid 2.1% to $1,916.90 and palladium was

up 0.1% at $1,386.47.