* Fed sees progress in US job market - minutes
* Two Bank of England policymakers voted to raise rates
* Coming up: US existing home sales, jobless claims Thursday
(Adds NEW YORK to dateline, second byline, updates market
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Aug 20 Gold prices fell on
Wednesday as the dollar rallied on economic optimism after the
minutes of the Federal Reserve's latest meeting showed the U.S.
central bank has seen progress in the U.S. labor market.
The Federal Reserve has been surprised by how quickly the
U.S. labor market is healing but does not want to bring forward
a planned rate hike until the recovery looks more convincing,
according to minutes of its last policy meeting in late July.
Strong economic data, including Tuesday's encouraging U.S.
housing starts report, has weighed on gold's appeal as a hedge
against economic uncertainties.
"In the last 24 hours we had good U.S. housing data and
that's one insight into the strength of the world's largest
economy, which also seems to be the reason why the dollar became
a lot stronger against the other currencies," Societe Generale
analyst Robin Bhar said.
Spot gold was down 0.4 percent at $1,290.21 an ounce
by 2:42 p.m. EDT (1842 GMT), while U.S. COMEX gold futures
for December delivery settled down $1.50 at $1,295.20.
The dollar index jumped about 0.4 percent. Gold tends
to suffer from strength in the dollar, in which it is priced, as
this makes it more expensive for other currency holders.
The metal managed to avoid heavy losses as global equities
mostly halted their recent rally on Wednesday after Bank of
England minutes showed two rate-setters voted earlier this month
to raise interest rates. The S&P 500 index, however,
turned slightly higher after the Fed minutes.
Bullion investors will now turn their focus to Friday, when
Federal Reserve Chair Janet Yellen will address an annual
gathering of policymakers in Jackson Hole, Wyoming.
Among other precious metals, silver was up 0.2
percent at $19.46 an ounce, while platinum dropped 0.7
percent at $1,421.75 an ounce and palladium fell 1.5
percent to $865.75 an ounce.
(Additional reporting by Clara Denina in London and A.
Ananthalakshmi in Singapore; Editing by Keiron Henderson, David
Evans and Tom Brown)