* Markets cautious ahead of Trump's midnight deadline for

Iran

* Iran rejects ceasefire deal; Trump ramps up threats

* Fed presidents highlight inflation concerns

* Fed March policy meeting minutes due on Wednesday

(Updates prices as of 0519 GMT)

By Pablo Sinha

April 7 (Reuters) - Gold ticked down on Tuesday as

investors stayed cautious ahead of a deadline set by U.S.

President Donald Trump for Iran to reopen the Strait of Hormuz.

Spot gold edged 0.2% lower to $4,638.30 per ounce by

0539 GMT, while U.S. gold futures for June delivery fell

0.4% to $4,664.

"Everyone is in a mode where we're waiting for whatever the

outcome is of this diatribe that the president has been on for

the past several days," said Ilya Spivak, head of global macro

at Tastylive, a financial derivatives trading platform.

Iran and Israel traded attacks as Tehran defiantly refused

to reopen the Strait of Hormuz and accept a ceasefire deal on

the eve of Trump's deadline to agree to his demands or get

"taken out."

Oil prices extended gains, holding above $110 a barrel as

Trump raised his rhetoric against Iran.

The surge in oil prices has fuelled inflation concerns.

While gold typically benefits during periods of inflationary

pressure, higher interest rates reduce its appeal as a

non-yielding asset.

Cleveland Federal Reserve President Beth Hammack and Chicago

Fed President Austan Goolsbee both see inflation as a far bigger

problem than employment, underscoring their support for

maintaining tighter monetary policy.

Markets widely see no chance of a Fed rate cut this year,

according to CME's FedWatch tool.

Investors now await minutes of the Fed's March policy

meeting on Wednesday, as well as U.S. inflation indicators,

including the Personal Consumption Expenditures (PCE) and

Consumer Price Index (CPI) data later this week.

"Last year, gold went off on its own and became its own

speculative narrative. We're likely to see that re-emerge this

year after whatever sort of risk washes off here... ultimately

by the end of the year, we could end up closer to $5,500 and

$6,000," Spivak said.

Spot silver fell 0.8% to $72.19 per ounce, platinum

shed 1% to $1,959.82 and palladium slid 0.6% to

$1,475.93.