* U.S. completes ninth night of strikes against Iran

* Oil prices jump to over one-month high, Brent above

$90/bbl

* Fed's Hammack signals openness to U.S. interest rate hike

(Updates prices as of 0635 GMT)

By Pablo Sinha

July 20 (Reuters) - Gold prices edged lower on Monday as

investors assessed an escalation in the Middle East war that

pushed oil prices higher, while another U.S. Federal Reserve

policymaker signalled that interest rate hikes may be needed to

curb price pressures.

Spot gold inched 0.3% lower to $4,004.63 per ounce,

as of 0635 GMT. U.S. gold futures for August delivery

lost 0.2% to $4,008.70.

Oil prices jumped more than 3% after U.S. forces struck Iran

for a ninth consecutive day on Monday as the number of confirmed

American military deaths in the renewed fighting rose to three

and concerns grew over shipping through the Strait of Hormuz.

"The war is still ongoing, with a focus on rising oil prices

that could lead to higher inflation, which is keeping gold

pressured," said GoldSilver Central Managing Director Brian Lan.

However, "$4,000 has been an important level, and shows that

there is support for the metal when it falls below that mark."

Elevated oil prices stoke inflation fears and bets of

higher-for-longer interest rates. While gold is typically seen

as an inflation hedge, high interest rates increase the

opportunity cost of holding the non-yielding asset.

Cleveland Fed President Beth Hammack added her voice to a

growing chorus of policymakers arguing interest rates may need

to rise to beat back persistent inflation, setting up a charged

debate at the Fed's next meeting on July 29.

Traders are now pricing an 82% chance of a December

interest-rate-hike, versus 73% last week, according to the CME

FedWatch tool.

"On the longer term, I'm more cautious on gold and looking

at the key $3,886 level, which, if taken out on the downside,

could potentially unleash further weakness towards $3,500," said

Kelvin Wong, a senior market analyst at OANDA.

Elsewhere, spot silver gained 1.3% to $56.61 per

ounce, while platinum was down 0.3% at $1,587.20, and

palladium inched 0.3% lower to $1,243.99.