PRECIOUS-Gold rises on Middle East tension; platinum at 10-year peak

By Brijesh Patel and Anmol Choubey

June 19 (Reuters) - Gold prices gained on Thursday, as the Iran-Israel conflict entered its seventh day, while platinum rose to a more than 10-year high on expectations of a supply shortfall.

Spot gold XAU= was up 0.1% at $3,371.15 an ounce, as of 0526 GMT. U.S. gold futures GCcv1 fell 0.6% to $3,388.60.

"Gold has made a modest bounce as we await the next steps in the Israel-Iran conflict. If the U.S. does decide to get directly involved, this could raise the geopolitical stakes," KCM Trade Chief Market Analyst Tim Waterer said.

Gold is often used as a safe store of value during times of geopolitical and financial uncertainty.

Geopolitical tensions remained heightened as U.S. President Donald Trump on Wednesday refrained from confirming whether the U.S. would join Israel's bombardment of Iranian nuclear and missile sites, prompting residents of Tehran to leave the city amid ongoing air strikes.

The U.S. military has moved some aircraft and ships from bases in the Middle East that may be vulnerable to a potential Iranian attack, two U.S. officials told Reuters on Wednesday.

Meanwhile, the U.S. Federal Reserve held interest rates steady on Wednesday. Fed policymakers still forecast slashing rates by half-a-percentage point this year, but they have slowed the pace of future cuts.

However, Fed Chair Jerome Powell cautioned against putting too much weight on this outlook, warning of "meaningful" inflation ahead as higher import tariffs loom.

Elsewhere, platinum XPT= rose 1% to $1,336.08. Earlier in the session, the metal hit $1,348.72, its highest level since September 2014.

"Platinum lease rates are high, so the refineries are not looking to manufacture because the cost is much higher. So demand is coming, but there's not enough supply... above ground inventory is tight," said Brian Lan, managing director at GoldSilver Central, Singapore.

Platinum lease rates refer to the cost of borrowing platinum for a set period of time. High lease rates can indicate a shortage of platinum in the market.

Palladium XPD= gained 1.1% to $1,059.96, while silver XAG= was steady at $36.72 per ounce.