Aug 3 (Reuters) - Gold prices gained on Monday ‌as the dollar weakened and optimism over a possible U.S.-Iran agreement sent oil prices sharply lower, tempering inflation fears and expectations of prolonged high interest rates.

Spot gold was up 0.3% at $4,052.96 per ounce, as of 1221 GMT. ​U.S. gold futures edged 0.2% higher to $4,051.70. The precious metal posted its first monthly ​rise in five in July, rising about 1%.

Oil prices slumped more than $4 a ⁠barrel, after U.S. President Donald Trump held off a fresh attack on Iran as he ​sought a quick deal that would halt Tehran's nuclear ambitions and reopen the Strait of Hormuz.

Trump said ​that talks with Iran will happen on Monday but declined to set a deadline for an agreement, although Iran said there were no talks under way with the United States.

"We are back to the previous correlation, with gold ​rising when crude oil falls, and gold falling when oil rises... The lower oil price is ​today reducing modestly U.S. rate hike expectations for this year, and supporting gold," UBS analyst Giovanni Staunovo said.

Elevated ‌oil ⁠prices stoke concerns around inflation and higher interest rates, diminishing bullion's appeal as a non-yielding asset.

Further supporting gold, the U.S. dollar came under pressure, hitting its lowest since mid-June, after authorities intervened in the foreign exchange market to support the yen, while yields on the benchmark 10-year U.S. Treasury ​note also fell.

Also in focus ​is a set ⁠of U.S. jobs reports due this week, including the ADP employment report, and nonfarm payrolls data.

"A weaker U.S. job market would allow the Fed ​to keep rates on hold this year, and that would be positive ​for gold, ⁠as the market prices out rate hikes for this year," Staunovo said.

Three U.S. Federal Reserve officials who dissented at the policy meeting last week in favour of a rate hike expressed concerns on Friday ⁠that without ​an immediate increase in short-term borrowing costs, inflation will stay ​stuck above the Fed's 2% target.

Spot silver gained 0.2% to $57.77, while platinum lost 0.7% to $1,630.78, and palladium fell 0.8% to $1,263.20.