(Updates for U.S. trade)

* U.S. dollar holds near six-week high

* CME FedWatch predicts 58% chance of at least one U.S.

rate hike this year

* Trump to swear in Warsh as Fed chair later in the day

* Price volatility subdues Indian demand

By Ishaan Arora

May 22 (Reuters) - Gold on Friday headed for its second

straight weekly loss, pulled lower by a firmer dollar and rising

oil prices that kept inflation concerns in focus and increased

bets for a U.S. interest rate hike.

Spot gold fell 0.5% to $4,519.69 per ounce, by 1255

GMT. It is down 0.4% so far in the week. U.S. gold futures

for June delivery lost 0.5% to $4,520.90.

"Gold is still very much on the defensive. Critically, it's

still holding support at $4,500 on a technical basis so that's

keeping the downside somewhat in check. The upside is limited,

though, with the stronger dollar and rising oil capping gains,"

said Edward Meir, an analyst at Marex.

Oil prices climbed as investors doubted U.S.-Iran peace talks

would yield any breakthrough. The dollar held near a six-week

high, making dollar-priced bullion more expensive for holders of

other currencies.

High energy prices tend to drive up inflation and could

prompt central banks to keep interest rates higher for longer,

which weakens demand for non-yielding bullion, even though it

can be an inflation hedge.

Traders have priced in a 58% chance of at least one 25

basis-point U.S. Federal Reserve interest rate hike by December,

according to CME Group's FedWatch tool.

"If (oil prices) remain supported at these levels for much

longer, inflation concerns are likely to stay elevated. In that

case, we could see bond yields push higher again, which in turn

could weigh on precious metals," said Fawad Razaqzada, market

analyst at City Index.

Benchmark 10-year U.S. Treasury yields dipped

but hovered near one-year highs.

Later on Friday, U.S. President Donald Trump will swear in Kevin

Warsh as Fed chair, the administration said.

In India, gold traded at a steep discount this week as price

volatility eroded demand. Premiums also eased in China.

Spot silver fell 1.2% to $75.77 per ounce, platinum

lost 1.8% to $1,930.33 and palladium fell 1.5% to

$1,358.26. All the metals were on course for weekly losses.