PRECIOUS-Gold inches down on firmer dollar, muted response to US-Iran tension

    * Spot gold looks neutral in $1,214-$1,237 range -
    * SPDR holdings rise 0.55 pct on Monday

 (Updates prices)
    By Karen Rodrigues
    BENGALURU, July 24 (Reuters) - Gold prices edged down on
Tuesday on a firmer dollar and a rise in U.S. Treasury yields
and as investors' reaction to the dispute between the United
States and Iran remained muted.
    Spot gold        was down 0.3 percent at $1,220.27 an ounce
at 0703 GMT.
    U.S. gold futures         for August delivery were 0.4
percent lower at $1,220.20 an ounce. 
    The dollar index       , which measures the greenback
against a basket of six major currencies, was up 0.2 percent at
94.838. It hit a one-year high of 95.652 last week.       
    "In addition to the U.S. dollar, there has been little
follow through on the Trump and Rouhani war of words and frankly
the overall reaction on risk sentiment was muted," said Stephen
Innes, APAC trading head, OANDA.
    "I think the market realises the chance of this escalation
leading to a U.S. military reprisal is overblown." 
    Iran on Monday dismissed an angry warning from U.S.
President Donald Trump that Tehran risked dire consequences if
it made threats against the United States.             
    Trump on Sunday warned Iranian President Hassan Rouhani not
to threaten the United States again, after Rouhani cautioned
Trump about pursuing hostile policies against Tehran.
    Gold prices, which usually gain in times of political and
financial instability, have failed to do so, analysts noted.
    "The fall in both oil and gold prices overnight is a
testament that investors are likely focused on oversupply risks
rather than on geopolitical risks which are traditionally
short-lived in nature," OCBC said in a commentary on Tuesday.
    Meanwhile, benchmark 10-year U.S. Treasury yields rose to
their highest in five weeks on Monday as the Federal Reserve was
seen as likely to continue raising interest rates despite
criticism from U.S. President Donald Trump.      
    Expectations that the U.S. Federal Reserve will raise
interest rates put pressure on gold prices as the yellow metal
does not yield interest.
    "Technically, gold is struggling very hard to recover and as
long as the dollar remains in charge gold is going to suffer," a
Hong Kong-based trader said.
    Also, gold has broken the 200-day moving average on a weekly
basis, giving the metal a tinge of technical weakness, the
trader added. 
    Spot gold looks neutral in a range of $1,214-$1,237 per
ounce, Reuters technical analyst Wang Tao said.         
    Holdings of SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, rose 0.55 percent to 802.55
tonnes on Monday, its highest in over two weeks.           
    In other precious metals, silver        was nearly unchanged
at $15.37 per ounce. 
    Platinum        was 0.2 percent lower at $829.20 an ounce
and palladium        fell 0.5 percent at $909.30 per ounce.

 (Reporting by Karen Rodrigues in Bengaluru; Editing by Sunil
Nair and Vyas Mohan)