May 8 (Reuters) - Gold rose on Friday and was on course for a weekly gain as markets priced in optimism over a prospective U.S.–Iran peace agreement, helping temper concerns high inflation will lead to higher-for-longer interest rates.
Considered a safe haven in times of global turmoil, as a non-yielding asset, gold can come under pressure from rising interest rates, so hopes that the price shock caused by the war could be temporary were supporting it.
Spot gold was up 0.8% at $4,721.96 per ounce, as of 1144 GMT. Bullion has gained 2.3% so far this week, the most since March 30.
U.S. gold futures for June delivery rose 0.4% to $4,730.90.
The United States and Iran exchanged fire on Thursday in the most serious test yet of their month-long ceasefire, but Iran said the situation returned to normal while the U.S. said it did not want to escalate.
"The market is already pricing in a (U.S.-Iran) peace agreement, which is yet to be signed or settled upon. So we're seeing some confidence in the precious metals market," said independent analyst Ross Norman.
Oil prices were on course to fall about 6% this week, as markets assessed chances for a potential peace deal between the U.S. and Iran.
Gold has fallen more than 10% since the war began in late February, pressured by higher oil prices that have stoked inflation concerns and muddied the interest rate outlook.
Markets now wait for the monthly U.S. employment report due later in the day to assess the Federal Reserve's monetary stance.
Nonfarm payrolls are forecast to have increased by 62,000 last month after rebounding by 178,000 in March, a Reuters survey of economists showed.
The dollar and the benchmark 10-year U.S. Treasury yields eased, further supporting gold.
"The structural bull run is certainly still in place. I would envisage likely we would see a recovery in the precious metals complex, but not at the heady pace that we saw earlier this year," Norman added.
Spot silver rose 2.7% to $80.62 an ounce, platinum gained 0.2% to $2,047.12, both headed for a weekly gain of 6.8% and 2.9% respectively. Palladium was up 1.3% at $1,500.69, but was on track for a weekly loss of 1.9%.
Reporting by Pablo Sinha in Bengaluru; Editing by Tomasz Janowski
