PRECIOUS-Gold glimmers near two-month high as Middle East conflict escalates

June 16 (Reuters) - Gold prices rose on Monday, nearing a two-month high as investors sought refuge in safe-haven assets after intensified clashes between Israel and Iran stoked fears of a broader regional conflict.

FUNDAMENTALS

Spot gold XAU= gained 0.4% to $3,447.07 an ounce, as of 0021 GMT, after hitting its highest level since April 22 earlier in the session.

U.S. gold futures GCcv1 gained 0.4% to $3,467.20.

Israel and Iran launched fresh attacks on Sunday, killing and wounding civilians and raising concerns of a broader regional conflict, with both militaries urging civilians on the opposing side to take precautions against further strikes.

U.S. President Donald Trump said on Sunday that he hopes Israel and Iran can broker a deal but said sometimes countries have to fight it out first.

The U.S. Federal Reserve is scheduled to convene its policy meeting on June 17-18, with its decision due Wednesday.

While the central bank is widely anticipated to keep interest rates steady, markets are keen for signals on potential rate cuts in the months ahead.

The Fed has held its benchmark Fed funds rate at 4.25%-4.50% since December, following a quarter-point reduction.

Gold, often considered a safe-haven asset during times of geopolitical and economic uncertainty, tends to thrive well in low-interest-rate environment.

Meanwhile, U.S. consumer sentiment improved for the first time in six months in June as trade tensions between the U.S. and China eased, but households worried about the economy's trajectory.

Elsewhere, spot silver XAG= was down 0.2% at $36.23 per ounce, platinum XPT= rose 0.6% to $1,234.47, while palladium XPD= gained 0.9% to $1,036.58.