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LONDON, June 1 (Reuters) - Bullion fell more than two percent on Thursday to a one-month low as gold's decline accelerated due to a firming dollar, dealers said.

Other precious metals followed. Platinum fell to its lowest level in three weeks while silver dropped 2.8 percent.

''Given its failure to advance higher after hitting fresh 26-year highs, gold is likely to continue its consolidation phase, going into the traditionally slower summer months,'' Standard Bank said in a report.

Spot gold

The metal has fallen more than $100, or 14 percent, after hitting $730 about three weeks ago. Prices had surged to an all-time high of $850 in January 1980.

Gold's fall also dulled investors' interest in mining stocks, prompting declines in shares of Australia's top two gold producers, Newcrest Mining Ltd. and Lihir Gold Ltd..

The dollar rose against the euro after the minutes from the Federal Reserve's latest policy meeting stoked expectations the central bank will raise interest rates again later this month.

Traders said the European Central Bank also might soon lift its rate.

A rise in the U.S. currency makes dollar-priced gold costlier for holders of other currencies and lowers demand.

Industry officials said the metal was poised to set new highs.

Ian Cockerill, the chief executive of South Africa's Gold Fields, said on Wednesday the gold price may hit $1,000 per ounce over the next few years, partly fuelled by hefty investment demand from oil producers with excess cash.

Only after several more years of rallying prices would the market probably return to equilibrium levels, but these would be double the level of previous down cycles, he told Reuters.

dropped to $12.18 an ounce before rising to $12.28/12.38, against $12.53/$12.51 in New York.

Spot platinum fell to $1,236/$1,246 an ounce from $1,246/1,251, while palladium was down $336/$342 an ounce from $348/353.

Reuters CS DS1407