PRECIOUS-Gold poised for seventh monthly gain on geopolitical worries, softer US yields

By Anmol Choubey

Feb 27 (Reuters) - Gold rose on Friday and was headed for a seventh straight month of gains, supported by geopolitical tensions after the United States and Iran extended nuclear talks, while softer U.S. Treasury yields further boosted bullion.

Spot gold XAU= was up 0.8% at $5,227.62 an ounce by 09:35 a.m. ET (1435 GMT). Prices climbed 7.4% so far in February.

U.S. gold futures GCcv1 for April delivery rose 0.9% to $5,242.10.

"There's a lot of nervousness surrounding geopolitics, you have all the set-up for a high probability of a military operation over the weekend so it's a risk-off in a flight to safety," said Phillip Streible, chief market strategist at Blue Line Futures.

The United States and Iran made progress in Thursday’s nuclear talks, mediator Oman said, but hours of negotiations ended without a breakthrough that could avert possible U.S. strikes amid a major military buildup.

Meanwhile, the U.S. Embassy in Jerusalem also permitted non‑emergency staff and families may leave Israel citing safety risks.

U.S. 10‑year Treasury yields US10YT=RR slipped to a three‑month low, making non‑yielding gold more attractive by lowering its opportunity cost.

Gold's next likely upside target is $5,450, with key support near $5,120, Streible said.

Data showed that U.S. producer prices increased more than expected in January, suggesting inflation could pick up in the months ahead.

Markets are pricing in about a 43.6% chance of a 25‑basis‑point U.S. Federal Reserve rate cut in June, as per the CME FedWatch tool.

Elsewhere, top consumer China's net gold imports via Hong Kong in January rose by 68.7% from December, Hong Kong Census and Statistics Department data showed.

China's central bank moved to curb the yuan's rise by removing risk‑reserve rules for forex forwards, encouraging more dollar buying.

Spot silver XAG= rose 3.4% to $91.31 an ounce, on course for a 7.8% monthly gain.

Spot platinum XPT= climbed 3.5% to $2,352.25 an ounce while palladium XPD= was up 0.1% at $1,785.25. Both the metals were headed for monthly gains.