PRECIOUS-Gold up on dollar, oil price drop; headed for second straight monthly decline

(Updates prices)

* Bank of England spells out inflation risks from Iran war

* Citi says gold under near-term pressure, but medium term looks bullish

* Indian central bank's gold share in foreign exchange reserves rises

* Platinum gains more than 4%

By Ashitha Shivaprasad

April 30 (Reuters) - Gold rose on Thursday on a softer U.S. dollar and easing oil prices, but remained on track for a second straight monthly decline as inflation concerns amid the ongoing Iran war clouded the outlook for interest rate cuts.

Spot gold was up 1.6% at $4,615.50 per ounce by 11:40 a.m. EDT (1540 GMT), after falling to a one-month low on Wednesday. U.S. gold futures rose 1.5% to $4,628.00. A small reprieve in the acceleration in energy prices and the drop in the dollar are benefiting the gold market on Thursday, with a lot of focus on Federal Reserve rate expectations, said David Meger, director of metals trading at High Ridge Futures. The dollar fell, as Japan intervened to prop up the yen, its first bout of official intervention in nearly two years. A weaker dollar makes greenback-priced metals more affordable for holders of other currencies. Global oil prices eased after hitting a four-year high earlier in the session. Surging energy prices have stoked inflation concerns, cloudingcentral banks' rate-cut paths. Spot gold isdown more than 1% so far this month. Despite being a hedge against inflation and uncertainty, higher interest rates tend to reduce gold's appeal, making interest-bearing assets relatively more attractive. The Fed on Wednesday kept rates on hold but raised concerns about inflation. Meanwhile, the Bank of England also kept rates on hold and set out scenarios for the economic impact of the Iran war, one of which could require a "forceful" increase in borrowing costs. Data showed the U.S. Personal Consumption Expenditures Price Index jumped 0.7% last month, the largest gain since June 2022. The increase was in line with economists' expectations. Analysts at Citi said pressure to sell gold could remain strong in the very near term due to the uncertainty in the Middle East, but expect the metal to eventually regain its appeal as a safe-haven asset. Citi kept its price targets for gold unchanged at $4,300 for the next three months and $5,000 for the six-to-12-month window.

Meanwhile, the share of gold in India's foreign exchange reserves had risen to 16.7% by the end of March.

Spot silver gained 2.4% to $73.19. Platinum was up 4.4% to $1,961.50, and palladium added 2.1% to $1,488.92. (Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Diti Pujara and Paul Simao)