* Trump extends deadline for striking Iran's energy

plants to April 7

* Commerzbank raised its year-end gold price target to

$5,000/ozSpot gold touched a four-month low of $4,097.99 on

Monday

(Updates prices for Amers mid-session trade, adds comments)

By Anushree Mukherjee

March 27 (Reuters) - Gold prices surged more than 3% on

Friday on dip-buying after a pullback earlier this week, while

investors looked for signs of de-escalation in the Middle East

conflict.

Spot gold rose 3.6% to $4,536.29 per ounce as of

11:39 a.m. ET (1538 GMT). U.S. gold futures for April

delivery gained 3.6% to $4,533.70.

"The recent selloff created a really good opportunity

because the market sold off... prices went below the 200-day

moving average...this is an incredible time to buy gold" said

Daniel Pavilonis, senior market strategist at RJO Futures.

Spot gold touched a four-month low of $4,097.99 on Monday.

"We're going to see a slow grind higher over the next couple

of weeks. And then if this Iranian situation could kind of move

past us, we have a pretty prime opportunity to be risk on,"

Pavilonis said.

Oil prices held above $110 per barrel despite U.S. President

Donald Trump extending a deadline for Iran to reopen the Strait

of Hormuz after Tehran rejected a 15-point U.S. proposal to end

the fighting.

The war, now in its fourth week, has spread across the

Middle East, hitting the global economy with soaring energy and

fertilizer prices that have fueled inflation fears.

Rising inflation has shifted the Federal Reserve outlook

toward potential rate hikes, which typically weigh on gold by

increasing the opportunity cost of holding the non-yielding

asset.

Traders have fully priced out U.S. rate cuts in 2026,

according to CME Group's FedWatch Tool, compared with

expectations for two cuts before the war began.

However, Commerzbank raised its gold price forecasts,

lifting its year-end target to $5,000/oz from $4,900, saying the

recent pullback is unlikely to be sustained.

The bank expects the Iran war to end in the spring, which

could temper current expectations for U.S. rate hikes. It sees

the Federal Reserve resuming rate cuts later this year, lowering

rates by about 75 basis points by the middle of next year.

Spot silver rose 4.4% to $71.01 per ounce. Spot

platinum gained 3% to $1,882.05, while palladium

rose 3.7% to $1,403.54.

(Reporting by Anushree Mukherjee in Bengaluru; Editing by Joe

Bavier and Arun Koyyur)