PRECIOUS-Gold nears 2-week high as dollar drops on hopes Iran war may end soon

By Ishaan Arora

April 1 (Reuters) - Gold was at a near two-week high on Wednesday after posting its biggest monthly loss in nearly 17 years in March, as the U.S. dollar and Treasury yields weakened on signs of de-escalation in the war on Iran.

Spot gold XAU= rose 1.2% to $4,723.35 per ounce by 0958 GMT, having earlier hit its highest level since March 19. U.S. gold futures GCcv1 for April delivery gained 1.5% to $4,749.90.

U.S. President Donald Trump and Secretary of State Marco Rubio said the end of the war on Iran could be near, signalling potential for both direct talks with Tehran and a winding down of the conflict even without a deal.

Trump will provide an update on Iran in an address at 9 pm EDT on Wednesday (0100 GMT on Thursday).

"It is positive sentiment after another statement from Donald Trump... We have seen the U.S. dollar index weaker, the euro firmer against the dollar. The futures on bonds, but also on interest rates (cuts) are up and that indicates the opportunity cost of holding gold has declined," said Quantitative Commodity Research analyst Peter Fertig.

The U.S. dollar fell to a one-week low, making greenback-price gold less expensive for those with other currencies. Benchmark 10-year U.S. Treasury yields US10YT=RR slipped to a near two-week low. USD/

Gold fell more than 11% in March in its steepest monthly decline since October 2008 as surging oil prices have fuelled inflation concerns.

While gold is often used as a hedge against inflation and geopolitical risks, expectations of a hawkish monetary policy response have made non-yielding bullion less attractive among investors.

"The market is switching the narrative sometimes on gold as a safe haven ... or if it is more the inflation impact, then gold could also suffer together with equities because the markets are fearing that this would force central banks to at least keep rates on hold in the case of the Fed," Fertig added.

Elsewhere, spot silver XAG= fell 0.8% to $74.50 per ounce, platinum XPT= gained 0.5% to $1,958.75 and palladium XPD= was down 0.2% at $1,473.75.