July 28, 2014 / 3:26 AM / 5 years ago

PRECIOUS-Gold slips on stronger dollar, but holds above $1,300

* Dollar index near 6-month highs; equities also stronger
    * Markets eye U.S. data, Fed meeting later this week for
cues
    * Coming up: U.S. Markit services PMI, pending homes index

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, July 28 (Reuters) - Gold slipped on Monday due to
a stronger dollar but was supported near $1,300 an ounce as its
safe-haven appeal rose due to heightened tensions between the
West and Russia, and violence in the Middle East.
    Trading during Asian hours was thin as investors were eyeing
the Federal Reserve's policy meet and major U.S. data releases
later in the week to gauge the strength of the economy and the
outlook for the central bank's monetary policy.
    Spot gold dipped 0.2 percent to $1,304.60 per ounce
by 0632 GMT, largely holding the previous session's 1.1 percent
gain. The metal logged its second consecutive weekly drop on
Friday on strong U.S. economic data.
    "Gold is still seeing some safe-haven interest but is under
pressure today because of the dollar," said a trader in Sydney.
"The key test will be later in the week when we get jobs data
and possible comments from the Fed on U.S. interest rates."
    A string of recent strong economic data has increased
speculation that the Fed will hike interest rates sooner than
expected. 
    The U.S. dollar hovered near six-month highs against a
basket of major currencies early on Monday, holding on to solid
gains made last week. 
    A stronger greenback pressures dollar-denominated gold as
the metal becomes more expensive for holders of other
currencies.
    Gold, seen as an alternative investment, was also sold as
Asian stocks shrugged off a drop in Wall Street and hovered near
three-year highs on Monday. 
    Bullion investors were closely watching developments in the
Middle East and Ukraine for signs of worsening tensions that
could bid up its safe-haven appeal.
    Fighting subsided in Gaza on Sunday after Hamas Islamist
militants said they backed a 24-hour humanitarian truce but
there was no sign of any comprehensive deal to end fighting with
Israel. 
    Fierce clashes between Ukrainian troops and pro-Russian
rebels continued on Sunday as Europe and the United States
prepared economic sanctions on Russia over the conflict.
 
    "Gold will likely enjoy a measure of stability at least in
the early part of the week on account of the deteriorating
situation with Russia and the expected stiffer round of
sanctions being contemplated by the Europeans," INTL FCStone
analyst Edward Meir said in a note.
    But the slew of U.S. numbers later in the week that are
likely to be good should boost equities and hurt gold prices,
Meir said. 

    PRICES AT 0632 GMT
 Metal            Last     Change   Pct chg
                                    
 Spot gold         1304.6    -3.19    -0.24
 Spot silver         20.6    -0.07    -0.34
 Spot platinum     1477.7      7.8     0.53
 Spot palladium     877.5      2.1     0.24
 Comex gold        1304.5      1.2     0.09
 Comex silver       20.66    0.024     0.12
 Euro              1.3433                  
 DXY               81.027                  
                                    
 COMEX gold and silver contracts show the
 most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Richard Pullin and
Gopakumar Warrier)
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