* Trump pauses effort to escort ships in the Strait of

Hormuz

* Trump says great progress made towards deal with Iran

* Dollar, oil ease as Trump indicates possible Iran peace

deal

(Updates prices, adds details as of 0632 GMT)

By Noel John

May 6 (Reuters) - Gold prices climbed more than 2% on

Wednesday after U.S. President Donald Trump indicated a possible

peace deal may be reached with Iran, sending the dollar and

crude lower as inflation concerns ebbed somewhat.

Spot gold jumped 2.4% to $4,667.39 per ounce, as of

0632 GMT, having hit its highest since April 28. U.S. gold

futures for June delivery rose 2.4% to $4,678.20.

U.S. President Donald Trump said on Tuesday he would briefly

pause an operation to help escort ships through the Strait of

Hormuz, citing progress toward a comprehensive agreement with

Iran.

U.S. Secretary of State Marco Rubio told reporters on

Tuesday that "operation Epic Fury is concluded," adding that

"we're not cheering for an additional situation to occur."

Gold gained as "oil prices retreated on reduction in

geopolitical risk premium, after the U.S. confirmed that the

ongoing fragile ceasefire between Iran is still intact, despite

the skirmish that was seen at the start of this week," said

Kelvin Wong, a senior market analyst at OANDA.

"Any signs of re-escalation of tension between the two of

them, you will see gold prices seeing some form of

profit-taking, or for short-term speculators to unwind their

near-term net long position in gold," Wong said.

A weaker U.S. currency makes dollar-priced metals cheaper

for holders of other currencies. ]USD/]

Elevated crude oil prices can stoke inflation, increasing

the likelihood of higher interest rates. While gold is

considered an inflation hedge, high interest rates make

yield-bearing assets more attractive, weighing on its appeal.

Investors await U.S. non-farm payrolls later this week,

which will test whether the economy remains resilient enough to

keep the Federal Reserve's monetary policy on hold.

"Factors such as economic growth risks, worsening

geopolitical relations, currency volatility and downside risks

to equity markets will continue to support gold's role as a

portfolio diversifier," ANZ said in a note.

Spot silver rose 4.2% to $75.84 per ounce, platinum

gained 2.6% to $2,002.75, and palladium was up

2.5% at $1,522.93.

(Reporting by Noel John in Bengaluru; Editing by Rashmi Aich

and Mrigank Dhaniwala)