* Gold posted biggest daily gain since February on Wednesday

* Markets price in 57% chance of rate hike in September -

CME FedWatch

* Iran warns Gulf states US strikes will trigger attacks on

them

* US non-farm payrolls report due at 08:30 a.m ET, Friday

(Updates for U.S. morning open)

By Sukanya Mitra

Aug 6 (Reuters) - Gold rose for the fourth straight session

tohit a seven-week high on Thursday, as markets scaled back

expectations of U.S. Federal Reserve interest rate hikes and

awaited the non-farm payrolls report for clues on the central

bank's monetary policy path.

Spot gold rose 0.4% to $4,261.98 per ounce by 10:24

a.m EDT (1424 GMT), earlier hitting its highest since June 18.

The yellow-metal climbed over 4% on Wednesday, its largest daily

gain since February.

U.S gold futures gained 0.4% to $4,322.70.

"A lot of money that was on the sidelines started coming

back into gold yesterday with some technical levels being

breached," said Bob Haberkorn, senior market strategist at

StoneX.

Haberkorn added that Fed outlook remains the main driver for

gold and Friday's U.S. jobs data will influence what the central

bank says on interest rates, adding that if the report comes in

with a big miss, it could quickly negate the entire upside move

in gold.

Traders are currently pricing in about a 57% chance of a

rate hike at the central bank's September meeting, down from 65%

last week, according to the CME FedWatch Tool.

Higher interest rates raise the opportunity cost of holding

non-yielding bullion, making gold less attractive to investors.

Oil prices rose on Thursday as investors remained cautious

on the outcome of Iran-Oman talks.

Iran has made a concerted diplomatic push with Gulf states,

warning them explicitly that Tehran will hit their oil, power

and water plants unless they convince Donald Trump to end U.S.

strikes on Iran and instead seek a negotiated end to the war.

"The ceasefire and the potential for the Strait of Hormuz to

open shipping lanes is bullish for gold because it suggests less

inflation, lower oil prices and easier monetary policies from

the Federal Reserve and other central banks," said Jim Wyckoff,

a market analyst at American Gold Exchange.

Among other metals, spot silver fell 0.9% to $61.53

per ounce.

Platinum was little changed at $1,734.49, and

palladium rose 1.2% to $1,380.33.