PRECIOUS-Gold slides 1 pct as dollar gains ahead of Fed meeting

    * Dollar near eight-week high against yen
    * Fed expected to unveil plans to trim balance sheet
    * World stock index hits record but gold stocks fall

 (New throughout, updates prices, market activity and analyst
comment; adds gold stocks fall, Kinross spending plans; adds
byline, changes dateline, previous LONDON)
    By Maytaal Angel and Dave Gregorio
    LONDON/NEW YORK, Sept 18 (Reuters) - Gold fell 1 percent on
Monday, touching a 2-1/2-week low, as the dollar strengthened
and U.S. Treasury yields rose ahead of a two-day Federal Reserve
meeting, while a world stock market index surged to a record and
Wall Street also hit new highs.
    Easing tensions on the Korean peninsula also reduced gold's
safe-haven bid.
    On Sept. 8, gold's session high of $1,357.54 an ounce was
the highest in 13 months. On Friday, U.S. data showed hedge
funds and other speculators had raised net long positions in the
precious metal for nine straight weeks.        
    "There was a lot of speculative froth in the gold market
which seems to have receded now," Commerzbank analyst Carsten
Fritsch said in a telephone interview. "Expectations that the
Fed will raise U.S. interest rates argue for a correction here."
    Spot gold was down 1.04 pct at $1,305.46/oz by 2:05 p.m. EDT
(18:05 GMT). The most active U.S. gold         futures for
December delivery settled down $14.40, or 1.09 percent, at
$1,310.8 per ounce. 
    Spot silver        was down 2.63 pct at $17.117/oz, while
platinum        fell 0.99 pct to $954.5/oz. Palladium        was
up 1.42 pct at $936.1/oz.
    The dollar hit an eight-week high against the yen, as
investors increased bets the Fed could raise interest rates in
    Fed policy makers meet Tuesday and Wednesday. Investors
expect the Fed will announce plans to start trimming its balance
sheet, which should support the dollar and weigh on
dollar-priced gold.
    World stocks hit a record high.             But shares of
gold mining companies fell sharply.              U.S. Treasury
yields rose.       
    "Gold doesn't do well in a high rate environment," INTL
FCStone analyst Edward Meir said in a telephone interview,
noting that central banks have been tightening or moving toward
tightening in Canada, England, Europe and the United States.
    Gold's slide on Monday did not bring it as low as $1,300 an
ounce. Meir said gold's support level on the charts was around
$1,280 an oz while the $1,300 level "is more psychological."
    Investors grew less worried about tensions on the Korean
peninsula. Chinese President Xi Jinping and U.S. President
Donald Trump spoke about pressuring North Korea with economic
sanctions imposed through the United Nations, the White House
    Trump addresses world leaders at the United Nations on
    Kinross Gold Corp        gave the go-ahead to spend more
than $1 billion to expand two of its gold mines, including its
Tasiast mine in West Africa.             

 (editing by Jonathan Oatis)