Updates for Asia morning hours

By Noel John

May 21 (Reuters) - Gold held steady on Thursday, as rising hopes of a U.S.-Iran peace deal countered fears of inflation and higher-for-longer interest rates.

Spot gold XAU= was down 0.2% at $4,534.69 per ounce, as of 0258 GMT. Bullion gained more than 1% on Wednesday after falling to its lowest level since March 30 earlier in the day.

U.S. gold futures GCcv1 for June delivery were steady at$4,536.70.

U.S. President Donald Trump said on Wednesday negotiations with Iran were in the final stages but warned of further attacks unless Iran agreed to a deal, adding that Washington could wait a few days to "get the right answers."

Sentiment improved "after Trump's remarks stating that both the U.S. and Iran are kind of reaching the final stages of peace deal agreement," said Kelvin Wong, a senior market analyst at OANDA.

However, "the overall trend of 10-year U.S. Treasury yield since the start of early March is still in a medium-term uptrend phase. Hence, gold bulls may not be so aggressive of beating up prices at this juncture," he said.

U.S. 10-year Treasury yields rose 0.3%, increasing the opportunity cost of holding non-yielding gold. MKTS/GLOB

Gold has fallen more than 14% since the Iran war began in late February, as elevated oil prices fuelled inflation risks and fears of interest rates staying higher for longer. Non-yielding gold tends to benefit when interest rates are lower.

Markets are increasingly pricing in possibilities of the Federal Reserve tightening monetary policy this year, with a 39% chance of a 25 basis-point hike expected in December, according to the CME Group's FedWatch tool. FEDWATCH

Minutes of the Fed's April meeting showed a majority of policymakers felt "some policy firming would likely become appropriate" if inflation stays persistently above the central bank's 2% target.

Gold prices are expected to remain weak in the upcoming sessions with resistance seen at $4,645 levels and support at $4,456 levels, said Wong.

Spot silver XAG= was down 0.8% at $75.40 per ounce, platinum XPT= lost 0.7% to $1,936.10, and palladium XPD= fell 0.4% to $1,365.12.