PRECIOUS-Gold rises as dollar softens, lower oil prices ease inflation fears

By Noel John

April 14 (Reuters) - Gold rebounded on Tuesday from a near one-week low hit the day before, on a softer dollar and as oil prices fell on hopes of further U.S.-Iran peace talks, easing inflation fears.

Spot gold XAU= was up 0.7% at $4,769.77 per ounce, as of 0509 GMT, after hitting its lowest level since April 7 in the previous session. U.S. gold futures GCcv1 for June delivery rose 0.5% to $4,791.70.

Oil prices fell below $100 a barrel as signs of potential U.S.-Iran dialogue to end their war eased concerns about supply risks stemming from the U.S. blockade of the Strait of Hormuz. O/R

Higher crude prices feed into inflation by raising transportation and production costs. While inflation typically boosts gold's appeal as a hedge, elevated interest rates weigh on the non-yielding metal's demand.

Markets appear to think that there's still time for a deal between the United States and Iran, said Ilya Spivak, head of global macro at Tastylive.

Reuters reported that negotiations between Washington and Tehran were still ongoing, while U.S. Vice President JD Vance said in an interview that the U.S. expected Iran to make progress in opening the Strait of Hormuz.

Meanwhile, the U.S. military began a blockade of Iran's ports on Monday, President Donald Trump said, and Tehran threatened to retaliate against its Gulf neighbours' ports after weekend talks in Islamabad on ending the war broke down.

Additionally, the U.S. dollar hovered near its lowest level in more than a month, making gold denominated in the greenback more affordable for holders of other currencies. USD/

"Near-term, a thin macro calendar might make U.S.-Iran headlines the driving engine. That sets the stage for choppy price action for now," Spivak said, adding that gold could face resistance around $4,850 levels.

Among other metals, spot silver XAG= rose 2% to $77.05 per ounce, platinum XPT= gained 0.4% to $2,077.72, while palladium XPD= was down 0.1% at $1,571.65.