* Gold down 4.3% so far in the month * Silver faces first monthly decline in 5 months * Platinum on track for worst month since March * Palladium eyes third straight monthly gain (Updates prices) By Nakul Iyer Sept 30 (Reuters) - Gold fell on Wednesday and was on track for its biggest monthly decline in nearly four years, as the dollar benefited from caution that crept into financial markets after the first U.S. presidential debate. Spot gold dropped 0.6% to $1,885.49 per ounce by 1129 GMT, declining 4.3% so far in September, setting it up for its worst monthly performance since November 2016. U.S. gold futures were down 0.7% at $1,890.20 per ounce. "I think from gold's perspective, it (the election debate) was a non-event and all we saw gold doing was honouring its inverse relationship with the U.S. dollar," said independent analyst Ross Norman. He said gold still had momentum but had probably made most of its gains this year. "Gold is in a consolidation pattern, but within a bull trend," he added. A chaotic first U.S. presidential debate turned investors cautious and drove them to seek refuge in the dollar, reducing gold's appeal for other currency holders. The dollar index was set for its best month since July 2019. Gold also failed to take advantage of retreating U.S. stock futures after Trump cast doubt on whether he would accept the election's outcome. [ "If you do get a situation where Trump refuses to acknowledge the result of the election because he lost, then I think that would be very beneficial for gold," said Natixis analyst Bernard Dahdah. While that may not be the base case scenario for gold, such an event would raise questions over the U.S. political and economic system and therefore benefit gold, he added. Investors also tracked progress on a new U.S. coronavirus relief bill. Silver fell 1.8% to $23.74 per ounce and platinum dropped 1.4%, to $872.17. Silver was on track for its first monthly contraction since March, falling 16.1% and platinum was set to report its biggest fall since March, declining 6.4%. Palladium rose 0.7% to $2,324.32 per ounce and was up 3.4% for the month. (Reporting by Nakul Iyer in Bengaluru, additional reporting by Diptendu Lahiri; editing by Barbara Lewis and Louise Heavens)
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