PRECIOUS-Gold gains for second straight session, yet set for monthly fall
By Ashitha Shivaprasad
March 30 (Reuters) - Gold rose for a second straight session on Monday as safe-haven demand picked up, although prices were headed for a monthly decline as the Middle East conflict drove expectations of inflation and higher global interest rates.
Spot gold XAU= rose 0.6% to $4,518.57 per ounce by 1:32 p.m. ET (1732 GMT) after hitting its lowest level since November early last week.
U.S. gold futures GCcv1 settled 0.7% higher at $4,557.50.
"The war is still running hot and there's no resolution in sight and that's pushing gold prices higher due to safe-haven demand ... Market focus in the near term will be on the war, crude oil prices, bond yields, and the U.S. dollar index," said Jim Wyckoff, senior analyst at Kitco Metals.
President Donald Trump said that Iran's energy plants and oil wells would be obliterated unless the country opened the Strait of Hormuz, after Tehran described U.S. peace proposals as unrealistic and fired waves of missiles at Israel.
SET FOR WORST MONTHLY PERFORMANCE SINCE 2008
Gold has fallen over 14% so far in March, putting the metal on track for its worst monthly performance since 2008, as surging energy prices have heightened inflation concerns and prompted markets to reassess their interest rate expectations. FEDWATCH O/R
Gold is often used as a hedge against inflation and geopolitical uncertainty but does not yield interest, making it less attractive when interest rates are high.
Federal Reserve Chair Jerome Powell said the U.S. central bank can afford to wait and see how the Iran war affects the economy and inflation. The Fed left its overnight benchmark interest rate steady in the 3.50%-3.75% range earlier this month.
A series of economic data is due this week, including U.S. job openings, retail sales, the ADP employment report and nonfarm payrolls.
Fawad Razaqzada, market analyst at City Index and FOREX.com, said the $4,700–$4,750 zone appears to be a test for any short-term recovery in gold.
"If gold can't break through there, then this bounce risks fading just like the others we've seen recently," he added.
Among other metals, spot silver XAG= rose 1% to $70.27. Spot platinum XPT= gained 1.6% to $1,891.71 and palladium XPD= climbed 2.9% to $1,416.47.
