June 12 (Reuters) - Gold headed for a second straight weekly loss on Friday as expectations of higher interest rates weighed on the non-yielding metal ahead of next week's Federal Reserve meeting.

Spot gold declined 0.2% at $4,205.39 per ounce as of 1323 GMT, and was down 2.9% so far for the week.

U.S. gold futures rose 2.7% to $4,226.10.

"I think that the inflation is going to linger for some time, even if oil prices do come down... we've heard this story before and there's some degree of skepticism," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Oil prices fell over 2% after the news that a memorandum between the United States and Iran to halt the war in the Gulf could be signed as soon as Sunday, a Western source told Reuters on Friday, with Geneva emerging as the likeliest venue. [O/R]

Gold has been under pressure since the conflict began at the end of February, on concerns that oil-driven inflation means central banks will keep interest rates elevated.

While investors regard gold as an inflation hedge, higher rates tend to weigh on the non-yielding metal.

Traders are pricing in a more than 58% chance of a U.S. rate hike by December, according to the CME FedWatch tool.

Data this week showed U.S. producer prices increased more than expected in May, while consumer inflation jumped above 4%. 

Attention is also turning to the Federal Reserve's June 16-17 policy meeting, the first to be chaired by Kevin Warsh, which the market expects to hold rates steady.

Elsewhere, Rolex raised the global price of its gold watches by an average 5% this month, marking a rare second annual increase for its main markets including Britain, Hong Kong and the U.S., according to two luxury research platforms and two dealers.

Spot silver fell 0.7% to $66.88 per ounce and platinum lost 0.4% at $1,712.77, with both metals headed for a weekly loss. Palladium rose 1.6% to $1,285.03, and was headed for a weekly gain. 

(Reporting by Anushree Mukherjee in Bengaluru; editing by Barbara Lewis)

By Anushree Mukherjee