* Trump extends deadline for striking Iran's energy

plants to April 7

* Commerzbank raised its year-end gold price target to

$5,000/oz

* Gold set for weekly loss of 1.6%

By Anushree Mukherjee

March 27 (Reuters) - Gold prices rose on Friday on

dip-buying but were still headed for a fourth straight weekly

loss, with gains capped by rising expectations of U.S. rate

hikes as inflation concerns intensify due to the Iran war.

Spot gold rose 0.9% to $4,416.90 per ounce as of 9:34

a.m. ET (1334 GMT) but was still set for a weekly loss of 1.6%

after touching a four-month low of $4,097.99 earlier in the

week.

U.S. gold futures for April delivery gained 0.8% to

$4,411.10.

"Gold has been on a bit of a downward trend in recent times,

and we've seen investors kind of take profit, which is providing

it some support," said Fawad Razaqzada, market analyst at City

Index and FOREX.com.

"But I do fear that gold could potentially resume a lower

trajectory, given that we've seen renewed strength in crude oil

prices and the U.S. dollar also finding support against major

currencies," he added.

Oil prices held above $110 per barrel despite U.S. President

Donald Trump extending a deadline for Iran to reopen the Strait

of Hormuz after Tehran rejected a 15-point U.S. proposal to end

the fighting.

The war, now in its fourth week, has spread across the

Middle East, hitting the global economy with soaring energy and

fertiliser prices that have fuelled inflation fears.

Rising inflation has shifted the Federal Reserve outlook

towards potential rate hikes, which typically weigh on gold by

increasing the opportunity cost of holding the non-yielding

asset.

Traders have fully priced out U.S. rate cuts in 2026,

according to CME Group's FedWatch Tool, compared with

expectations for two cuts before the war began.

However, Commerzbank raised its gold price forecasts,

lifting its year-end target to $5,000/oz from $4,900, saying the

recent pullback is unlikely to be sustained.

The bank expects the Iran war to end in the spring, which

could temper current expectations for U.S. rate hikes. It sees

the Federal Reserve resuming rate cuts later this year, lowering

rates by about 75 basis points by the middle of next year.

Spot silver fell 0.4% to $67.74 per ounce. Spot

platinum gained 0.5% to $1,835.60, while palladium

rose 0.9% to $1,370.18.