*

G7 leaders to discuss Israel-Iran conflict in Canada

*

No sign of panic among investors over Middle East

escalation

*

Fed policy decision due on Wednesday

(Adds graphic, updates prices for EMEA mid day session)

By Anushree Mukherjee

June 16 (Reuters) - Gold fell on Monday as investors

weighed the impact of the ongoing Israel-Iran conflict, while

also focusing on the Group of Seven (G7) leaders meeting and the

U.S. Federal Reserve policy decision later this week.

Spot gold fell 0.4% to $3,419.89 an ounce, as of

1059 GMT, after hitting its highest level since April 22 earlier

in the session.

U.S. gold futures were down 0.4% to $3,439.80.

"Geopolitical tensions are not disappearing near term,

as well rates are likely to be cut further by the central bank

(Fed), so that should provide a floor to gold," said Giovanni

Staunovo, an analyst at UBS.

Iranian missiles struck Israel's Tel Aviv and the port city

of Haifa before dawn on Monday, part of a wave of attacks by

Tehran in retaliation for Israel's strikes on Friday.

The dangers of further escalation loomed over a summit of G7

leaders in Canada, as wars in Ukraine and the Middle East add to

global economic uncertainty.

But there was no sign of panic among investors as currency

markets stayed calm and Wall Street stock futures firmed after

an early dip.

"Investors will be watching developments in the Middle East

very closely, especially the risk of other countries being

dragged into the conflict," said Ole Hansen, head of commodity

strategy at Saxo Bank.

Gold is considered a safe-haven asset during times of

geopolitical and economic uncertainty. It also tends to thrive

in a low-interest rate environment.

The Fed's interest rate decision on Wednesday followed by

Fed Chair Jerome Powell's comments will be eagerly watched. The

Fed has held its policy rate in the 4.25%-4.50% range since

December.

Elsewhere, spot silver rose 0.2% to $36.36 per

ounce, platinum rose 1.5% to $1,245.85, while palladium

gained 1.3% to $1,041.49.