PRECIOUS-Gold extends gains as Trump suspends attacks on Iran for two weeks

April 8 (Reuters) - Gold extended gains on Wednesday as markets reassessed near-term risks after U.S. President Donald Trump said he agreed to suspend bombing and attacks on Iran for two weeks, easing immediate escalation fears.

Spot gold XAU= was up 1.3% at $4,765.59 per ounce by 2247 GMT, after rising 1.2% in the previous session, while U.S. gold futures GCcv1 for June delivery gained 2.3% to $4,793.20.

Trump said he has agreed to suspend bombing and attack for two weeks, and the United States had received a 10-point proposal from Iran that he described as a workable basis for negotiations.

The comments came after Trump had earlier set a deadline for Iran to reopen the Strait of Hormuz or face possible U.S. retaliation.

Pakistan, which has been mediating between Washington and Tehran, had requested a two‑week extension to allow diplomacy to proceed. A senior Iranian official told Reuters that Tehran was reviewing the proposal positively.

Higher inflation due to rising energy prices could complicate rate-cut decisions by central banks. While gold serves as an inflation hedge and a safe-haven asset in uncertain times, its appeal diminishes in a high-interest-rate environment due to its lack of yield.

An extended disruption of the world's oil trade could push U.S. inflation above 4% by year-end, with even bigger increases possible in the short term, according to research by the Federal Reserve Bank of Dallas.

Gold, which started the year on a strong note, has declined about 10% since the Iran war began on February 28.

Market participants are awaiting minutes from the Federal Reserve's March meeting, set for release later on Wednesday.

Meanwhile, China continued its gold-buying spree, with the People's Bank of China extending purchases for the 17th consecutive month, according to data on Tuesday.

Among other metals, spot silver XAG= rose 2.4% to $74.70 per ounce, platinum XPT= gained 1% to $1,976.95, and palladium XPD= was up 0.7% at $1,479.75.