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June 24 (Reuters) - Gold continued its decline on Wednesday, hitting its lowest level in nearly two weeks, as the dollar rose amid growing expectations of a U.S. interest rate hike, while investors assessed conflicting signals on talks between the United States and Iran.

Gold fell 1.1 percent to $ 4,064.01 an ounce by 0431 GMT in spot trading, after earlier hitting its lowest level since June 11. U.S. gold futures for August delivery dropped 1.7 percent to $ 4,080.80 .

US President Donald Trump said on Tuesday that Iran had agreed to nuclear inspections "indefinitely," but Tehran denied making any such concession during the negotiations, raising questions about the fragile agreement between the two sides.

The two sides also disagreed on the details of a clause that would allow Iran access to its frozen funds in foreign accounts.

"What we are seeing here is the evolution of the pressures that gold has been under as a result of the war," said Ilya Spivak, head of global macroeconomics at Tasty Life.

He added, "The inflation associated with raising interest rates has manifested itself in lower bond prices and higher yields, a rising dollar, and a decline in gold."

The price of gold has fallen by about 23 percent since the outbreak of the US-Israeli war on Iran in late February, as rising inflationary pressures have fueled expectations that the Federal Reserve (the US central bank) will raise interest rates.

While gold is traditionally seen as a hedge against inflation, it loses its appeal as a non-yielding asset when interest rates rise.

The dollar hit its highest level in more than a year, increasing the cost of gold for buyers holding other currencies.

The CME Group’s FedWatch tool indicates that traders are expecting three interest rate hikes from the Federal Reserve this year, compared with an expectation of one hike before the Fed’s meeting last week.

Investors are awaiting the release of US personal consumption expenditures data, the Federal Reserve's preferred benchmark for measuring inflation, due on Thursday, for further clues about monetary policy.

As for other precious metals, silver fell 1.6 percent to $ 61 an ounce in spot trading, platinum dropped 1.2 percent to $ 1,632.04 , and palladium declined 1 percent to $ 1,225.35 .