June 1, 2015 / 10:16 AM / 4 years ago

PRECIOUS-Gold steadies as dollar rallies after U.S. data

* Greece misses self-imposed Sunday deadline for debt deal

* Dollar rallies after strong U.S. manufacturing data

* Fed’s Rosengren dovish on rate increase (Adds updated prices, comment)

By Marcy Nicholson and Clara Denina

NEW YORK/LONDON, June 1 (Reuters) - Gold was little changed on Monday, giving up gains as the dollar rallied after the precious metal was initially buoyed by an unexpected stall in U.S. consumer spending and comments on interest rates from a Federal Reserve’s official.

Spot gold rose to a session high of $1,204.31 an ounce and was down 0.04 percent at $1,189.30 an ounce by 3:00 p.m. EDT (1900 GMT). It posted a second consecutive weekly fall last week, hitting a three-week low of $1,180.50 on Thursday.

U.S. gold futures for August delivery settled down $1.10 at $1,188.70 an ounce.

The U.S. dollar advanced against major currencies after stronger-than-expected data on U.S. manufacturing activity and construction spending, while mounting worries of a Greek default contributed to the euro’s weakness.

“The buying just dried up above $1,200 and the dollar made a comeback and we’re right back down to where we were,” said James Steel, chief metals analyst for HSBC Securities in New York.

Gold prices were lifted earlier by heavy short covering in response to earlier data and comments by Boston Fed President Eric Rosengren, Steel said.

Rosengren said he would like to begin raising rates as soon as possible, but risks from the slowdown in China and Europe in particular loom large, even as growth at home is still not strong enough.

The week will contain a number of economic pointers culminating with the jobs report on Friday, which investors will peruse for clues on the timing of a rate increase.

Higher rates would reduce demand for non-interest-paying bullion.

Investors were monitoring the Greek situation after Athens missed a self-imposed Sunday deadline for reaching an agreement with its lenders to unlock aid.

Without a deal, Greece risks default or bankruptcy in weeks, a possibility that has supported gold prices to an extent.

“Greece and global equity markets remain the perennial wild cards,” INTL FCStone said in a note.

Any worsening of the Greek debt crisis could potentially trigger demand for gold coins and bars. The metal is usually seen as a hedge against political and financial risk, although the impact on demand from wider political concerns is usually short lived.

Silver fell 0.1 percent to $16.68 an ounce. Platinum fell 0.3 percent to $1,104.28 ounce, while palladium was down 0.2 percent at $772.78 an ounce. (Additional reporting by A. Ananthalakshmi in Singapore; Editing by Pravin Char and Andre Grenon)

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