By Maytaal Angel
LONDON (Reuters) - Gold fell on Tuesday as the dollar surged to a new 2018 high, though the precious metal's losses were limited by worries the United States may be set to pull out of a key nuclear accord with Iran.
U.S. President Donald Trump is expected to announce at 1800 GMT that he is pulling out of the Iran nuclear deal, European officials said, after they struggled to persuade him that the accord has halted Iran's nuclear ambitions.
The decisions to leave the accord should raise risk aversion in the broader markets, helping gold, seen as a safe asset that holds its value in times of geopolitical turmoil, though the precious metal is for now under pressure from a strong dollar.
"A stronger dollar has created headwinds for gold but we don't see the dollar going much higher on a medium-term basis and in terms of geopolitics, there are some factors to keep an eye on," said Jens Pederson, senior analyst at Danske Bank.
Spot gold was down 0.6 percent at $1,306.26 per ounce at 1401 GMT. The precious metal has lost some 3.5 percent of its value over the last three weeks.
U.S. gold futures for June delivery were down 0.6 percent at $1,306.40.
Against a basket of rivals, the dollar surged to a 2018 high helped by safe haven flows linked to the Trump announcement on Iran and as expectations that other major central banks would follow the footsteps of the U.S. Federal Reserve in normalising monetary policy have been dashed.
Gold in 2018 will deliver its strongest annual price performance in five years, GFMS analysts forecast on Tuesday, as political uncertainty drives investment in bars and bullion-backed investment funds.
India's gold imports in April fell for a fourth straight month from a year ago to 57 tonnes, on subdued demand after local prices jumped to 21 month highs, provisional data from consultancy GFMS and bank dealers showed.
Spot gold may revisit its May 1 low of $1,301.51 per ounce as it twice failed to break resistance at $1,317, Reuters technical analyst Wang Tao said.
Silver fell 0.8 percent to $16.33 an ounce, while platinum was flat at $904.50, having hit its highest since April 25 in the last session.
Palladium rose 0.4 percent to $975.72 an ounce, after hitting on Monday its highest since April 27.
(Additional reporting by Apeksha Nair in Bengaluru, editing by Jon Boyle and Richard Balmforth)
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