PRECIOUS-Gold edges higher as Treasury yields, oil ease; market eyes MidEast developments

(Recasts for U.S. market open)

* Trump again says the war with Iran would end "very quickly"

* Investors see 48.6% chance the Fed could raise rates in December

* Minutes from the Fed's April FOMC meeting due later today

By Anjana Anil

May 20 (Reuters) - Gold prices edged up on Wednesday, as hopes for a resolution to the Iran conflict pressured oil markets, relieving some inflation fears and knocking U.S. Treasury yields from their recent highs.

Spot gold gained 0.4% to $4,499.72 per ounce by 9:10 a.m. ET (1310 GMT). Prices hit their lowest in more than seven weeks earlier in the session.

U.S. gold futures for June delivery were 0.2% lower at $4,502.10.

"We've seen a reprieve from the continued increase in yields. So as a result, we've seen gold prices bounce off the recent lows," said David Meger, director of metals trading at High Ridge Futures.

The yield on the benchmark 10-year U.S. Treasury note ticked lower, after touching its highest level since January 2025 on Tuesday.

Higher Treasury yields increase the opportunity cost of holding non-yielding bullion.

"Any type of resolution to the war or opening of the Strait of Hormuz would be a positive for the gold market in so much as the expectation would be that interest rates would decline, and hence that would be opportunistic or helpful to the gold market," Meger added. Brent crude futures slipped after U.S. President Donald Trump again said the war with Iran would end "very quickly." Still, investors remained cautious over the outcome of peace talks as the disruption to Middle Eastern supply continued.

Higher fuel costs feed into inflation, forcing central banks to keep interest rates higher. Despite being an inflation hedge, non-yielding gold underperforms in high interest rate environments.

Investors are now pricing in a 48.6% chance the Federal Reserve could raise rates in December, and an 89.6% chance it maintains current rates at its next meeting in June, according to the CME FedWatch tool.

Minutes from the Fed's April Federal Open Market Committee meeting will be released on Wednesday.

Spot silver rose 1.9% to $75.26 per ounce, platinum gained 0.5% to $1,932.37, and palladium was down 0.1% at $1,352.75. (Reporting by Anjana Anil in Bengaluru; Editing by Kirsten Donovan)