Updates prices, adds details, comment as of 0615 GMT

By Noel John

May 7 (Reuters) - Gold prices rose for a third consecutive session on Thursday, supported by a softer dollar as hopes of a U.S.-Iran deal eased concerns over inflation and prolonged high interest rates.

Spot gold XAU= was up 0.4% at $4,707.52 per ounce, as of 0615 GMT, after rising about 3% on Wednesday to hit its highest point since April 27. U.S. gold futures GCcv1 for June delivery rose 0.5% to $4,716.

U.S. President Donald Trump predicted a swift end to the war with Iran as Tehran considered a U.S. peace proposal that sources said would formally end the conflict while leaving unresolved key U.S. demands that Iran suspend its nuclear programme and reopen the Strait of Hormuz.

"Gold is edging higher today, supported by a subdued dollar and retreating oil prices as the existing ceasefire holds albeit tentatively, and hopes grow for a more durable long-term agreement between Washington and Tehran," said Tim Waterer, chief market analyst at KCM Trade.

"Gains, however, remain limited as traders remain wary of how fragile this pause actually is."

The dollar hovered near a more than three-month low hit in the previous session, making bullion less expensive for holders of other currencies. USD/

Benchmark 10-year U.S. Treasury yields US10YT=RR have eased 0.6% so far this week, lowering the opportunity cost of holding gold. US/

Brent crude oil prices are down about 6% so far this week as optimism grew about a possible end to the war in the Middle East. MKTS/GLOB O/R

Gold prices have fallen more than 10% since the war began in late February, pressured by higher oil prices. Elevated crude oil prices can stoke inflation, increasing the likelihood of higher interest rates. While gold is seen as an inflation hedge, high interest rates tend to weigh on the non-yielding asset.

Investors now await the monthly U.S. employment report on Friday to see if the U.S. economy remains resilient enough to keep the Federal Reserve's monetary policy on hold.

Spot silver XAG= rose 1% to $78.09 per ounce, platinum XPT= was down 0.1% at $2,059.60, and palladium XPD= gained 0.6% to $1,546.24.