* Israel and Lebanon agree to implement ceasefire

* Dollar, oil prices fall on US-Iran peace deal hopes

* U.S. nonfarm payrolls data for May due Friday

(Rewrites for Europe morning session)

By Noel John

June 4 (Reuters) - Gold prices rose on Thursday as hopes

of a resolution to the Middle East conflict pushed the dollar

and oil prices lower, easing fears of higher inflation and

interest rate hikes.

Spot gold was up 0.7% at $4,464.79 per ounce, as of

0856 GMT. U.S. gold futures for August delivery gained

0.6% to $4,491.80.

The dollar eased, making greenback-priced bullion more

affordable for holders of other currencies.

Israel and Lebanon agreed to implement a ceasefire to end

hostilities, the Trump administration said on Wednesday,

boosting hopes for a broader deal to end the U.S.-Israeli war on

Iran.

Additionally, the Republican-led U.S. House of

Representatives approved a resolution to block U.S. President

Donald Trump from continuing the war against Iran.

"A successful diplomatic outcome would allow crude flows to

resume and ease inflationary fears. Cooling geopolitical

concerns and lower oil prices weighing on the greenback could

help bullion extend its recovery," said Nikos Tzabouras, a

senior market analyst at Jefferies-owned Tradu.com.

Oil fell after the Israel-Lebanon ceasefire announcement.

Gold prices have fallen about 16% since the Iran conflict began

in late February as oil prices rose. Elevated crude oil prices

can stoke inflation, increasing the likelihood of higher

interest rates.

While gold is seen as a hedge against inflation, higher

rates tend to weigh on the non-yielding metal.

Meanwhile, consultancy Metals Focus expects gold to resume

its bull run in the second half of 2026, but sees total gold

demand falling 2% in 2026 due to double-digit losses in

jewellery and central bank purchases.

"The near-term outlook (for gold) remains challenging, and

the precious metal could slip deeper into bear territory over

the coming days. This combination of lingering geopolitical risk

and higher-for-longer interest rates benefits the U.S. dollar,

maintaining strong headwinds for gold," Tzabouras said.

Investors now await the U.S. nonfarm payrolls data for May

due on Friday to gauge the Federal Reserve's monetary policy

path.

Spot silver rose 0.8% to $73.31 per ounce, platinum

gained 1.3% to $1,883.15, and palladium added 0.5%

to $1,308.06.

(Reporting by Noel John in Bengaluru; Editing by Emelia

Sithole-Matarise)