PRECIOUS-Gold steadies as safe-haven flows offset strong dollar and reduced rate-cut bets

* Oil tankers burn after Iranian strikes

* US dollar up for third straight session

* BMI expects silver to average $93/oz in 2026 (Updates for US morning hours)

By Ashitha Shivaprasad

March 12 (Reuters) - Gold prices held nearly steady on Thursday, as support from safe-haven demand was offset by a stronger dollar and reduced expectations for interest rate cuts.

Spot gold was little changed at $5,183.39 per ounce by 9:11 a.m. ET (1311 GMT). U.S. gold futures for April delivery rose 0.2% at $5,190.50.

The dollar gained for a third consecutive session. The greenback is a competitive safe-haven asset, and a stronger U.S. currency makes gold more expensive for holders of other currencies.

"Gold has been range bound recently. The higher dollar index, rising treasury yields and lack of interest rate cuts are the negative factors, but the conflict in the Middle East has been generating some safe-haven flows," said Phillip Streible, chief market strategist at Blue Line Futures.

"If they can prevent oil prices from climbing further, gold should be in a good place... If crude starts to trend lower, you could see yields ease, the dollar give up some of its gains, and gold futures move higher."

Two tankers were ablaze in Iraqi waters, an apparent escalation in Iranian attacks that have cut off Middle East energy supplies, defying U.S. President Donald Trump's claim to have already won the war he launched two weeks ago.

In reaction, oil prices surged while global shares retreated, as hopes for an imminent de-escalation faded.

Higher oil prices feed into inflation by raising transportation and production costs. Gold is considered an inflation hedge, but high interest rates weigh on it by making yield-bearing assets more attractive.

Elsewhere, spot silver rose 1.6% to $87.19 per ounce. Prices gained more than 146% last year.

Analysts at BMI said in a note that they expect silver to average $93 per ounce in 2026, with strong investment demand consolidating the gains witnessed in 2025 and offsetting price-induced demand destruction in solar panels and jewellery.

Spot platinum added 0.7% to $2,184.00, while palladium rose 1.6% to $1,666.70. (Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Ros Russell)