Gold prices were headed for a third consecutive monthly loss on Friday as the ​U.S.-Israeli war on Iran heightened concerns over inflation and the prospect of further U.S. rate hikes.

Spot gold was ​up 0.6% ​at $4,518.57 per ounce, as of 0807 GMT, as investors assessed reports of an extension to the U.S.-Iran ceasefire. Bullion fell to a two-month low of $4,365.76 on Thursday, ⁠but closed higher.

The metal has lost 2.2% so far this month and roughly 15% over the past three months.

U.S. gold futures for August delivery inched 0.4% higher to $4,549.10.

"Yesterday, we saw gold went down to $4,360 and was likely to go down further until the (ceasefire) announcement ​came, due to which ‌we suddenly saw ⁠the reversal of ⁠prices. This is where the market continues to be this morning," said GoldSilver Central Managing Director Brian ​Lan.

The United States and Iran reached an agreement on Thursday to ‌extend their ceasefire and lift restrictions on shipping through the ⁠Strait of Hormuz, sources told Reuters, though U.S. President Donald Trump has yet to approve it and Iranian state media said it had not been finalised.

"Markets are now waiting for a deal to be signed even if it's only just pending Trump's signature."

Oil futures fell more than 1% on Friday and were on track for their steepest weekly decline since early April, easing some concerns around inflation driven by higher energy prices due to the Iran war.

U.S. inflation increased at its fastest pace in three years in ‌April, cementing economists' views that the Federal Reserve would hold interest ⁠rates unchanged well into next year.

While gold is considered ​a hedge against inflation, the non-yielding asset tends to come under pressure in a high-interest-rate environment.

Spot silver fell 0.4% to $75.32 per ounce and platinum lost 0.3% to $1,916.75, with both metals headed for a ​weekly loss. Palladium ‌gained 0.3% to $1,371.54, and was on course for a weekly gain.