Spot gold ​was down 0.3 per cent at $4,694.26 per ounce

Gold dropped on Monday, pressured by a firm dollar, while higher oil prices heightened fears of inflation and higher-for-longer interest ​rates as Iran­-US peace talks remained stalled.

Spot gold ​was down 0.3 per cent at $4,694.26 per ounce, as of 0059 GMT. Last ‌week, the yellow metal shed 2.5 per cent to snap a four-week winning streak.

US gold futures for June delivery dropped 0.9 per cent to $4,697.60.

The US president said on Sunday Iran could telephone if it wants to negotiate an end to their two-month war and repeated the country’s view that Iran should not have a nuclear weapon, after Iran said the US must remove obstacles to a deal, including its blockade of its ports.

The president cancelled a trip by two US envoys to Iran war mediator Pakistan on Saturday, ‌dealing a setback to peace prospects following Iran foreign minister’s departure from Islamabad after speaking only to Pakistani officials.

Oil prices rose, the dollar inched higher and US stock futures slid as stalled Iran-US peace talks prolonged the disruption of Middle East energy exports, unsettling markets and policymakers ahead of central bank meetings during the week.

In contrast, gold premiums in ​India jumped last week to their highest point in 2-1/2 months as supplies tightened, ‌while buying interest picked up in China.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings dropped 0.2 per cent to 966.30 metric ‌tons ​on Thursday.

Investors ​now await the US central bank’s interest rate decision, after its two-day meeting, on Wednesday.