Updates for U.S. morning open

By Sukanya Mitra

July 7 (Reuters) - Gold prices held steady on Tuesday, as investors monitored escalating hostilities in the Middle East and braced for minutes from the U.S. Federal Reserve's June meeting for guidance on the monetary policy outlook.

Spot gold XAU= was little changed at $4,168.62 per ounce by 09:01 a.m ET (1301 GMT), while U.S gold futures GCcv1 for August delivery rose 0.3% to $4,180.50.

Bullion hit a two-week high on Monday as a softer-than-expected U.S jobs data last week prompted markets to dial back near-term interest rate-hike expectations.

However, "I think the reality is setting in that the Fed is still very much focused on reigning in inflation - so higher for longer still seems the most likely Fed path," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Traders still expect a 60% chance of a rate hike in September, according to the CME FedWatch Tool. FEDWATCH/

Attention is now turning to the Fed's meeting minutes, scheduled for release on Wednesday.

In the Middle East, two tankers were hit in the Strait of Hormuz and Iran said there would be no more peace talks unless U.S. President Donald Trump halted his repeated threats to restart the war. Oil prices edged higher following the news. O/R

Gold often comes under pressure when inflation concerns keep interest rates elevated, reducing the appeal of non-yielding assets such as bullion.

Meanwhile, China's central bank maintained gold purchases for a 20th straight month, with its reserve hitting 75.44 million fine troy ounces by the end of June, up from 74.96 a month earlier.

Hong Kong launched a central clearing system for gold on Tuesday and also revived gold futures trading as it seeks to become a regional reserve hub for bullion.

Among other metals, spot silver XAG= dropped 1% to $61.48 per ounce. Platinum XPT= rose 1.2% to $1,650.47,and palladium XPD= gained 0.8% to $1,278.56.