Gold fell on Monday as investors weighed the impact of the ongoing Israel-Iran conflict, while also focusing on the Group of Seven leaders meeting and the Federal Reserve policy decision later this week.

Spot gold fell 0.5% to $3,415.36 an ounce, as of 0854 GMT, after hitting its highest level since April 22 earlier in the session.

U.S. gold futures were down 0.5% to $3,434.50.

"Geopolitical tensions are not disappearing near term, as well rates are likely to be cut further by the central bank, so that should provide a floor to gold," said Giovanni Staunovo, an analyst at UBS.

Iranian missiles struck Israel's Tel Aviv and the port city of Haifa before dawn on Monday, killing at least eight people and destroying homes.

The dangers of further escalation loomed over a summit of G7 leaders in Canada, with U.S. President Donald Trump expressing hope on Sunday that a deal could be done but no sign of the fighting abating on the fourth day of the conflict.

There was no sign of panic among investors as currency markets stayed calm and Wall Street stock futures firmed after an early dip. [usd/]

"Investors will be watching developments in the Middle East very closely, especially the risk of other countries being dragged into the conflict," said Ole Hansen, head of commodity strategy at Saxo Bank.

Gold is considered a safe-haven asset during times of geopolitical and economic uncertainty. It also tends to thrive in a low-interest rate environment.

On the radar this week is the Federal Reserve's interest rate decision and Fed Chair Jerome Powell's comments due on Wednesday. The Fed has held its policy rate in the 4.25%-4.50% range since December.

Elsewhere, spot silver rose 0.3% to $36.41 per ounce, platinum rose 1.2% to $1,242.85, while palladium gained 1.6% to $1,044.40.

Source: Reuters