PRECIOUS-Gold set for worst month in 4 years as dollar strengthens

    * 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
    "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)