PRECIOUS-Gold drops 1% as markets assess Mideast ceasefire prospects
By Noel John
March 26 (Reuters) - Gold prices fell on Thursday after two consecutive sessions of gains, as investors awaited clearer signs of progress in Middle East de-escalation efforts, the outcome of which could shape the global financial and monetary policy landscape.
Spot gold XAU= fell 1% to $4,476.51 per ounce by 0555 GMT. U.S. gold futures GCcv1 for April delivery lost 2.1% to $4,457.
U.S. President Donald Trump said Iran was desperate to make a deal to end nearly four weeks of fighting, contradicting the Iranian foreign minister who said his country was reviewing a U.S. proposal but had no intention of holding talks to wind down the conflict.
"In the next 24 to 48 hours, (gold prices) will just be about reacting to headlines about negotiations," said Kyle Rodda, a senior financial market analyst at Capital.com.
"The really big moves will happen probably at the start of next week when it becomes clearer whether the U.S. launches a ground invasion in Iran over the weekend."
Trump has vowed to hit Iran harder if Tehran fails to accept that the country has been "defeated militarily", White House press secretary Karoline Leavitt said on Wednesday.
Brent crude futures LCOc1 climbed back above $100 a barrel on concerns that protracted fighting in the Middle East will further disrupt energy flows. O/R
Since the start of the U.S.-Israeli war on Iran, Tehran has attacked nations that host U.S. bases and effectively closed the Strait of Hormuz, which handles a fifth of the world's oil and liquefied natural gas.
Higher crude prices tend to fuel inflation by pushing up transport and manufacturing costs. Although rising inflation typically boosts gold's appeal as a hedge, high interest rates weigh on demand for the non-yielding asset.
Spot silver XAG= fell 1.9% to $69.90 per ounce. Spot platinum XPT= was down 1.4% at $1,893.60, while palladium XPD= dropped 2% to $1,394.83.
