* Gold breaks above 50-day moving average

* Platinum, palladium hit highest level since June

* Silver touches its one-month high

(Updates for US mid-session trading)

By Polina Devitt and Sukanya Mitra

Aug 5 (Reuters) - Gold prices rose to their highest level in

almost seven weeks on Wednesday and were on track to post the

biggest daily growth since February due to lower Treasury yields

and hopes for progress on opening the Strait of Hormuz.

Spot gold climbed 4.4% to $4,256.85 per ounce by

11:04 a.m. ET (1504 GMT), having hit $4,258.99, its highest

since June 18, and broken above the 50-day moving average, which

now supports it at $4,160.

U.S. gold futures for December delivery rose 4% to

$4,317.40.

"The early adopters are getting back into precious metals as

the likelihood of rate hikes has fallen since last week. The

dollar has fallen sharply which helps. The Iran 'pause' helps as

well," said Tai Wong, an independent metals trader.

The dollar traded near six-week lows against major

currencies, while yield on U.S. 10-year notes

hovered near one-week lows after President Donald Trump said his

administration had "very good discussions" with Iran during

all-day negotiations, fuelling hopes the five-month conflict

could be nearing.

However, gold is still down 24% since hitting a record high

of $5,595 in January and down 19% since the start of the Iran

war fuelled concerns about energy inflation and reinforced bets

on interest rate hikes.

Demand for gold from central banks in first half of 2026 was

the lowest since 2022, according to the World Gold Council.

Outflows from gold-backed exchange-traded funds totalled 45 tons

in the second quarter, when bullion posted its sharpest

quarterly decline since 2013, falling 14%.

With central bank buying muted, retail interest focused

elsewhere and subdued physical demand in Asia,

rates-sensitive ETF demand is back as the marginal flow back in

the driver's seat for gold prices, J.P.Morgan said in a note.

"For the metals complex to gain real steam requires rate

cuts to be priced in but, for now, that's a 2027 story, at the

earliest," Wong said.

Spot silver rose 4.9% to $62.44 per ounce, after

hitting its highest level since July 6.

Platinum steadied at $1,735.28 and palladium

climbed 1.6% to $1,374.75. They hit highest since June 17 and

June 2, respectively, on the Iran peace talks.

"Platinum and palladium have priced in numerous headwinds

since the start of the conflict ranging from concerns over

slowing auto production, growing market share of EVs and scope

for growth in recycling," said Suki Cooper at Standard

Chartered.

She expects platinum to be undersupplied this year and

palladium to tilt into a surplus in 2026.

(Reporting by Sukanya Mitra and Noel John in Bengaluru and

Polina Devitt in London, additional reporting by Anjana Anil;

Editing by Shailesh Kuber and Joyjeet Das)