Updates prices, adds comments from Fed's Miran

By Ashitha Shivaprasad

May 8 (Reuters) - Gold drifted higher on Friday and headed for a weekly gain as optimism over a potential end to the Iran conflict helped ease concerns about inflation and elevated interest rates.

Spot gold XAU= added 0.5% at $4,709.89 per ounce by 1551 GMT and has gained 2.1% this week.

U.S. gold futures GCcv1 rose 0.2% to $4,719.60.

Gold, typically seen as a haven during periods of global turmoil, faces pressure in a higher-interest-rate environment due to its non-yielding nature.

"Gold is trading like a risk asset rather than a safe haven. The rebound in gold is tied to the prospects of de-escalation in Iran. With energy prices coming down, we're seeing the prospects for Fed rate cuts increase down the road," said David Meger, director of metals trading at High Ridge Futures, referring to the U.S. Federal Reserve.

U.S. and Iranian forces clashed in the Gulf and the United Arab Emirates came under renewed attack, but U.S. President Donald Trump said a ceasefire was holding.

Oil prices and the U.S. dollar index .DXY were set for weekly declines. A weaker U.S. currency makes dollar-priced gold less expensive for other currency holders, while softer energy prices ease concerns about inflation. USD/ O/R

According to the CME FedWatch tool, the market sees a 14% chance of a U.S. rate hike this year, down from around 22% the previous day.

Fed Governor Stephen Miran said he hopes central bank Chair Jerome Powell will stay on as governor for only a short period. Kevin Warsh is on track to succeed Powell as Fed leader pending a vote in the Senate.

Data showed U.S. employment increased more than expected in April. Gold briefly extended gains after the data.

Gold demand in India was muted this week, as a price recovery prompted potential buyers to postpone purchases, while China premiums remained steady on safe-haven demand. GOL/AS

Spot silver XAG= rose 2.1% to $80.09 an ounce and platinum XPT= gained 0.6% to $2,034.80. Both were headed for weekly gains.

Palladium XPD= fell 0.3% at $1,476.04 and was down over 3% for the week.