PRECIOUS-Gold struggles for traction as rate-hike bets, dollar dim appeal

    * Euro on the brink of breaching parity, stocks slide again
    * Fed rate hikes hang like millstone around gold's neck -
    * U.S. June CPI due on Wednesday

 (Updates prices)
    By Arundhati Sarkar
    July 12 (Reuters) - Gold steadied on Tuesday after dropping
to a nine-month low earlier as investors positioned for U.S.
economic data, with a strong dollar and bets for steep interest
rate hikes still keeping a leash on non-yielding bullion. 
    Spot gold        was little changed at $1,733.00 per ounce
by 1227 GMT after hitting $1,722.36 earlier in the session, its
lowest since Sept. 30. U.S. gold futures        rose 0.2% to
    The dollar index        scaled a 20-year peak, making
greenback-priced gold more expensive for buyers holding other
    "Gold is set to stay significantly suppressed over the
near-term, as the weight of more incoming super-sized Fed rate
hikes hang like a millstone around gold's neck," said Han Tan,
chief market analyst at Exinity.
    "A higher-than-expected headline CPI print (on
Wednesday)should pave the way for yet another 75 basis points
hike by the Fed later this month; a scenario widely interpreted
to be a negative for gold," Tan added.
    However, offering some support for zero-yield gold,
benchmark U.S. 10-year Treasury yields             dropped for a
second consecutive session.      
    A raft of U.S. economic data - including consumer prices,
retail sales and factory output - should provide a glimpse of
the extent to which inflation has peaked as the Federal Reserve
moves closer to next week's policy meeting.             
    Meanwhile, the euro sank to within a whisker of parity with
the dollar, and gold in euro            trading around
    Gold is struggling to hold onto any gains and any upside
"will likely be minor and hard fought," OANDA analyst Craig
Erlam said.
    Inflation data could hold the key to gold's price action,
with a higher number increasing the odds of another Fed rate
hike in September, Erlam added.
    Spot silver        fell 1.2% to $18.86 per ounce, platinum
       dropped 2.4% to $848.90, and palladium        shed 2.1%
to $2,117.59.

 (Reporting by Arundhati Sarkar in Bengaluru; Editing by Krishna
Chandra Eluri and Louise Heavens)