(Rewrites for US morning session)

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Iranian missiles hit Tel Aviv, Haifa

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G7 meets amid escalating Ukraine, Middle East conflicts

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Fed policy meeting concludes on Wednesday

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Platinum gains more than 2%

By Ashitha Shivaprasad, Anushree Mukherjee

June 16 (Reuters) - Gold prices slipped on Monday after

hitting nearly an eight-week high, while the market focused on

escalating Israel-Iran tensions and the Federal Reserve's policy

meeting this week.

Spot gold was down 0.5% to $3,416.48 an ounce by

8:57 a.m. EDT (1257 GMT) after hitting its highest level since

April 22 earlier in the session. Prices rose more than 1% on

Friday.

U.S. gold futures were down 0.5% to $3,436.10.

"Keep in mind that gold has moved higher over the past

several sessions, largely in response to the conflict between

Israel and Iran. Today, we're seeing more of a pullback, likely

due to profit-taking after that higher move," said David Meger,

director of metals trading at High Ridge Futures.

Iranian missiles struck Tel Aviv and the port city of Haifa

on Monday, prompting Israel's defence minister to warn that

residents in Tehran would "pay the price and soon".

Meanwhile, leaders from the Group of Seven nations begin annual

talks in Canada.

U.S. stock index futures rose while the dollar held ground

in choppy trading.

Investors are also focused on the Fed's two-day policy

meeting, which wraps up on Wednesday. The U.S. central bank is

widely expected to keep interest rates unchanged.

"At this point, it appears the Fed is inclined to remain on

hold, given the significant uncertainty in the economy, ranging

from tariffs to geopolitical tensions. So, it wouldn't be

surprising to see the Fed delay any interest rate cuts,

effectively kicking the can down the road," Meger said.

Bullion is viewed as a safeguard during times of

geopolitical instability and rising inflation. It also benefits

from low interest rate environments, since it doesn't offer any

yield income.

Among other metals, spot silver rose 0.4% to $36.45

per ounce, platinum jumped 2.6% to $1,259.80, while

palladium gained 2.3% to $1,051.07.