PRECIOUS-Gold slips as markets assess prospects of Iran ceasefire

* 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. (Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Nia Williams)