* Gold fell 2.4 pct in March, second monthly loss
* Dollar falls after weaker-than-forecast ADP report
* Investors await U.S. non-farm payrolls data on Friday
* Silver rises most among precious metals in Q1, up 6 pct (Updates prices, adds comment)
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, April 1 (Reuters) - Gold rallied 2 percent on Wednesday as the dollar retreated after a downbeat U.S. jobs report raised expectations that the Federal Reserve could be more cautious in tightening monetary policy.
The dollar fell 0.2 percent against a basket of currencies, after weaker-than-expected ADP private jobs data raised concerns that Friday’s impending jobs report could also point to worsening conditions in the labor market.
“There is so much discord in the U.S. data that is difficult to find what exactly the next report is going to be. It’s the uncertainty that pushes people towards safe-haven assets such as gold,” ING Bank senior strategist Hamza Khan said.
Spot gold rose 2.2 percent to a session high of $1,208.90 an ounce, and was trading up 1.8 percent at $1,204.90 at 2:12 p.m. EDT (1812 GMT). U.S. gold futures for June delivery settled up 2.1 percent at $1,208.20.
A strong reading from the U.S. jobs data on Friday could boost bets the Federal Reserve will hike interest rates sooner rather than later, lifting the opportunity cost of holding non-yielding gold.
However, a worse-than-expected report could support views that the Fed will hold off any rate hike until next year.
Gold is particularly sensitive to shifts in U.S. interest rates, which also move the dollar, in which the metal is priced.
“There’s a lot of concern about the employment report that’s coming out on Friday, that it might be worse than expected,” said Phillip Streible, senior commodities broker at RJO Futures in Chicago.
“Because of that, traders are positioning themselves with some safety ahead of the report.”
The world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Trust, in March recorded its biggest monthly outflow since December 2013.
Buying interest in China, the world’s second-largest gold consumer after India, has been relatively soft of late, but dealers reported some interest overnight after prices eased.
“Following yesterday’s sell off, China was back as a buyer today,” MKS said in a note. “We saw gold add a few dollars in Tokyo before Shanghai took over and sent the yellow metal to a session high.”
Silver rose 1.9 percent to $16.93 an ounce, while platinum was up 2 percent at $1,161.60 an ounce and palladium climbed 1.9 percent to $746.50 an ounce.
Silver saw the biggest gain among the precious metals in the last quarter, rising 6 percent, while palladium fell 7.6 percent. Platinum fell just over 5 percent. (Additional reporting by Manolo Serapio Jr.; Editing by William Hardy, Pravin Char, David Evans and Gunna Dickson)