CORRECTED-PRECIOUS-Gold at over one-week low as dollar, yields climb, Middle East tensions stoke inflation

Corrects paragraph 2 to say that spot gold had hit its lowest level since May 4 earlier in the session, and not that it was at the lowest level since May 4

Spot gold down over 3% for the week

U.S. Treasury yields rise to near one-year high

Oil gains, Trump leaves Beijing with no major breakthroughs

By Ishaan Arora

May 15 (Reuters) - Gold fell to a more than one-week low on Friday, as U.S. Treasury yields and the dollar climbed, while heightening inflation concerns due to the conflict in the Middle East reinforced bets for higher interest rates.

Spot gold XAU= was down 2.3% at $4,541.91 per ounce by 11:40 a.m. EDT (1540 GMT) after hitting its lowest level since May 4 earlier in the session. Prices were down 3.7% so far this week.

U.S. gold futures GCcv1 for June delivery lost 3.2% to $4,535.

"There was a selloff across the (precious metals) for a couple of reasons. The dollar is quite strong today. We're also seeing not just a U.S. increase, but a global increase in (bond) yield rates," said Edward Meir, an analyst at Marex.

Benchmark 10-year U.S. Treasury yields US10YT=RR rose to a near one-year high, increasing non-yielding bullion's opportunity cost. The dollar was set for its highest weekly gain in two months, making greenback-priced gold more expensive for overseas buyers. US/USD/

U.S. President Donald Trump said his patience with Iran was running out and left China with no major breakthroughs on trade or tangible help to end the war.

"The Chinese really didn't offer much help in resolving the conflict, and we're seeing crude oil move up, which reinforces the inflation narrative and that's been very bearish for the metals," he added.

Crude oil prices have risen more than 40% since the U.S.-Israel war on Iran began, leading to higher inflation globally. Central banks tend to hike interest rates during times of inflation, which in turn tends to dim non-yielding bullion's appeal. O/R

Traders have largely priced out U.S. interest rate cuts this year while bets for a hike have risen, according to CME's FedWatch Tool. FEDWATCH

Spot silver XAG= fell 8.6% to $76.27 per ounce, platinum XPT= lost 3.9% to $1,976.54, and palladium XPD= was down 1.7% at $1,412.11. All three were headed for weekly losses.

StoneX analyst Rhona O'Connell said silver was overbought and was in need of correction. Silver fell as much as 9% earlier and was on track for its worst daily performance since February 12.


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