* Trump urges Iran to act quickly on ceasefire plan

* US weekly jobless claims increase slightly

* Silver, platinum down over 3%

(Updates for U.S. morning hours)

By Ashitha Shivaprasad

March 26 (Reuters) - Gold prices retreated on Thursday,

hurt by a firmer dollar and higher oil prices that kept

inflation fears intact and sustained expectations of elevated

interest rates, while market participants reconsidered the

chances of a Middle East ceasefire.

Spot gold was down 1.2% at $4,450.64 per ounce by

9:26 a.m. ET (1326 GMT) after falling 2% earlier. U.S. gold

futures for April delivery lost 2.3% to $4,447.60.

The U.S. dollar nudged higher, making greenback-priced

bullion more expensive for other currency holders.

Gold is weighed down by concerns over higher interest rates

and inflation, said Jim Wyckoff, senior analyst at Kitco Metals.

"If the conflict continues, prices could dip below $4,000,

while a ceasefire and renewed rate-cut hopes could lift them

back toward $5,000," he said.

"Going forward, the gold market is going to continue

watching the headlines, with traders closely tracking inflation

reports," he added.

Despite being a hedge against uncertainty and inflation,

gold often loses appeal in a higher rate environment as rising

yields raise the opportunity cost of holding the metal.

Oil rose as prospects for a prolonged conflict in the Middle

East stoked concerns over further supply disruptions. Higher

energy prices could exacerbate inflationary pressures across

economies.

U.S. President ​Donald Trump warned Iran to "get serious"

about a deal to end nearly four weeks of fighting, after its

foreign minister said Tehran was reviewing the U.S. proposal but

that there were no talks on winding down the war.

Gold prices have fallen over 15% since the U.S.-Israeli war

on Iran began on February 28.

Elsewhere, data showed that new applications for U.S.

unemployment benefits rose slightly last week, suggesting the

labor market remains stable and giving the Federal Reserve scope

to hold interest rates steady while monitoring inflation risks

linked to the war.

Among other metals, spot silver fell 3.7% to $68.60,

platinum was down 3.1% at $1,860.10, while palladium

shed 4% to $1,366.75.