To update prices

April 2 (Reuters) - Gold prices fell on Thursday as the dollar and oil prices rose after President Donald Trump said the United States would continue to attack Iran, raising concerns about higher inflation and reinforcing expectations of an interest rate hike.

Spot gold fell 3.6 percent to $ 4,587.55 an ounce by 1315 GMT, after hitting a two-week high earlier in the session , while U.S. gold futures dropped 4.2 percent to $ 4,613.30 .

The dollar rose sharply, making gold, which is priced in dollars, cheaper to buy for holders of other currencies.

David Meijer, director of metals trading at High Ridge Futures, said, "The market is very focused on Trump's statements, which so far do not indicate a quick solution to the energy crisis."

He added that this negatively affects gold and silver prices, given the reduced likelihood of interest rate cuts.

In a televised address, Trump said the U.S. military was close to achieving its objectives in Iran, but he did not set a clear timetable for ending the more than month-long war, and vowed to bomb Iran until it returned to the "Stone Age."

This was followed by a rise in oil prices. Higher energy prices lead to overall inflation, which reduces the ability of central banks to lower interest rates.

Despite gold's status as an inflation hedge, the precious metal faces difficulties when interest rates are high because it does not generate any return.

The price of gold in spot trading has fallen 13 percent since the start of the conflict with Iran on February 28.

Sentiment was negatively affected by news that the Turkish central bank’s gold reserves fell by 69.1 tons to 702.5 tons last week, bringing the total decrease in the past two weeks to more than 118 tons, in an attempt by the authorities to limit the impact of the war on the market.

In Asia, gold traded at a premium in India for the first time in two months, as lower prices boosted demand, while premiums in China eased slightly as buyers awaited a larger price correction.

As for other precious metals, silver plunged 7.1 percent to $ 69.78 in spot trading. Platinum fell 2.7 percent to $ 1,911.13 , and palladium dropped 1.3 percent to $ 1,453.70 .