Gold Set for Worst Month in More Than 17 Years as US Rate-cut Hopes Fade

March 31 (Reuters) - Gold prices edged higher on Tuesday, helped by a softer dollar, but were poised for their worst month in more than 17 years as higher energy prices dimmed hopes for a U.S. interest rate cut this year.

FUNDAMENTALS

Spot gold XAU= rose 0.8% to $4,544.19 per ounce by 0114 GMT. U.S. gold futures GCcv1 for April delivery gained 0.3% to $4,573.20.

The U.S. dollar eased, making greenback-denominated commodities more affordable for holders of other currencies. USD/

Gold has lost about 14% so far this month, heading for its steepest fall since October 2008, pressured by a stronger U.S. dollar. However, prices are up about 5% so far this quarter.

Before the war in the Middle East began, there were expectations of two Fed rate cuts for this year.

Benchmark oil prices extended gains towards their largest ever monthly increase as the Middle East conflict deepened, raising supply concerns. O/R

Fed Chair Jerome Powell said on Monday the U.S. central bank can wait to see how the Iran war affects the economy and inflation, noting that policymakers typically look through shocks such as those from higher oil prices.

U.S. President Donald Trump warned that the U.S. would obliterate Iran's energy plants and oil wells if Tehran does not open the Strait of Hormuz, after Tehran described U.S. peace proposals as "unrealistic" and fired waves of missiles at Israel.

Spot silver XAG= rose 1.2% to $70.81 per ounce, spot platinum XPT= gained 0.1% to $1,901.95 and palladium XPD= was up 1.1% at $1,421.45.