PRECIOUS-Gold falls as energy-driven inflation threatens to push interest rates higher

(Recasts for US market open)

* Brent crude oil rose more than 3%

* US Personal Consumption Expenditures data due on Thursday

* UBS lowers year-end gold price target

By Anjana Anil

May 26 (Reuters) - Gold fell more than 1% on Tuesday on bets of higher U.S. interest rates this year, with U.S. military strikes on Iran dialing back hopes of a peace deal, elevating oil prices, and bringing inflation concerns to the forefront. Spot gold was down 1% at $4,526.86 per ounce as of 9:25 a.m. EDT (1325 GMT). U.S. gold futures for June delivery rose 0.1% to $4,527.90.

"The bond markets are thinking that the next rate move by the Federal Reserve is going to be an increase. That's a negative for the gold market here today," said Jim Wyckoff, market analyst at American Gold Exchange.

Kevin Warsh was sworn in as Federal Reserve chief on Friday. He took over the leadership of the U.S. central bank amid growing expectations of tighter global monetary policy. Markets currently expect a 25-basis-point Fed rate hike in December. Despite being an inflation hedge, non-yielding bullion struggles in a high-rate environment. Raising inflation concerns, the price of Brent crude oil rose more than 3% as uncertainty lingered over whether a peace deal between the U.S. and Iran would be reached to open up shipping flows through the Strait of Hormuz. Higher crude prices feed into inflation as manufacturers pass on higher costs to consumers. "Near-term technicals still favor the bears, so that's prompting some technical selling as well," Wyckoff said, adding that the release of the U.S. Personal Consumption Expenditures Price Index on Thursday will be closely monitored by the market to gauge inflation pressures and the Fed's future monetary policy path.

Meanwhile, UBS lowered its year-end gold price target by $400 to $5,500 due to persistent risks from higher yields and a stronger dollar.

Spot silver fell 2.1% to $76.43 per ounce, platinum lost 0.9% to $1,950.71, and palladium shed 0.2% to $1,396.26. (Reporting by Anjana Anil in Bengaluru; Editing by Paul Simao)