02:00 PM EDT, 06/01/2026 (MT Newswires) -- (Updates prices.)

Gold fell off a two-week high midafternoon Monday as the dollar rose after fresh attacks between the United States and Iran boosted oil prices, reviving inflation worries.

Gold for July delivery was last seen down US$81.70 to US$4,511.30 per ounce, after rising to the highest since May 14 on Friday.

The drop comes after the United States over the weekend attacked Iranian military sites, while The Guardian reported Iran on Monday targeted a U.S. military base in Kuwait and Iran said it will discontinue negotiations until Israel ends its war on Lebanon, pushing oil prices up from a six-week low.

The hostilities have dimmed prospects for a end to the war that began on Feb. 28, when the U.S. and Israel launched strikes on Iran, which responded by blockading the Strait of Hormuz, the narrow waterway that is the chokepoint for 20% of daily oil demand supplied by Persian Gulf countries. The rise in oil since the start of the war has raised inflation and boosted the dollar on worries central banks will need to hike interest rates to slow rising prices.

"Gold trades lower following last week's rebound from key support as oil prices recovered and progress in US-Iran peace talks remained slow. The price action highlights the market's ongoing struggle to balance the inflationary implications of elevated energy prices -- which tend to support the dollar and bond yields -- against longer-term bullish drivers such as de-dollarisation, fiscal debt concerns, and persistent central bank demand," Saxo Bank wrote.

The dollar was higher early, with the ICE dollar index last seen up 0.26 points to 99.17. Treasury yields were also higher, with the U.S. two-year note last seen paying 4.055%, up 4.5 basis points, while the yield on the 10-year note was up 2.8 points to 4.471%.