To update prices and add analyst commentary and details

June 1 (Reuters) - Gold fell on Monday under pressure from a stronger dollar and higher oil prices, as investors awaited U.S. President Donald Trump's decision on a proposed deal to extend a ceasefire with Iran.

Gold fell 0.3 percent to $ 4,521.25 an ounce by 0520 GMT in spot trading, after hitting a two-week high in the previous session. U.S. gold futures for August delivery lost 0.9 percent to $ 4,551.60 .

The dollar rose, increasing the cost of gold priced in US dollars for holders of other currencies.

Tim Waterer, chief market analyst at KCM Trade, said, "The rise in oil prices, coupled with the still-distant agreement between the United States and Iran, is enough to keep gold in a state of flux at the start of the week."

Trump said on Friday that he would make a decision soon on a proposed agreement to extend the ceasefire with Iran, despite continued disagreements between the two sides on key issues central to the conflict.

The United States said it bombed Iranian military sites earlier this week, and the Iranian Revolutionary Guard said on Monday that it targeted a US base in retaliation.

Israeli Prime Minister Benjamin Netanyahu on Sunday ordered troops to increase their incursion into Lebanon as part of the battle against the Iranian-backed Hezbollah armed group, despite a ceasefire declared more than six weeks ago.

Oil prices rose by more than two percent in early trading on Monday, raising concerns about inflation and rising interest rates .

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

Federal Reserve Vice Chair for Supervision Michelle Bowman said on Friday that the impact of the Middle East war on the economy, while still being assessed, could lead to a sustained rise in inflation that might require a tighter monetary policy.

As for other precious metals, silver rose 0.7 percent to $ 75.81 an ounce in spot trading, platinum gained 1.5 percent to $ 1,945.15 , and palladium climbed 1.4 percent to $ 1,372.75 .