* Oil prices bounce up from 5-1/2-year low
* Dollar pares losses vs basket of currencies
* Russian rouble recovers (Updates prices, adds comment)
By Marcy Nicholson and Clara Denina
NEW YORK/LONDON, Dec 16 (Reuters) - Gold was little changed on Tuesday, in a choppy session that took prices back below $1,200 an ounce as the dollar came off its lows and traders worried the U.S. Federal Reserve may remove the phrase “considerable time” before raising interest rates.
Spot gold was up 0.1 percent at $1,193.86 an ounce by 3:23 p.m. EST (2023 GMT), with a session low at $1,188.41. This came after a 12-minute rally of more than 1 percent to a session high at $1,221.40 when U.S. traders were still sleeping, after Russia announced an aggressive interest rate hike.
“We’re choppy ahead of the Fed minutes tomorrow afternoon because the traders in gold are fearful of the Fed changing horses midstream by taking out the phrase ‘considerable time’ before an interest rate hike,” said George Gero, precious metals strategist for RBC Capital markets in New York.
Investors are waiting to see if the Federal Reserve’s final meeting of 2014 on Tuesday and Wednesday results in a more hawkish tone, with a statement and forecasts expected on Wednesday at 1900 GMT, followed by Fed chief Janet Yellen’s press conference.
The U.S. economy has strengthened since the Fed’s last meeting in October, when it reiterated that benchmark rates were unlikely to rise for a “considerable time.” Officials will have to decide whether to replace that phrase despite below-target U.S. inflation and economic weakness in Europe and Asia.
Oil prices have also continued to influence the gold market. U.S. crude futures were little changed after earlier falling below $54 per barrel, the lowest in more than five years.
The U.S. dollar clawed back some ground after earlier falling to three-week lows against the euro.
Shares exposed to Russia had earlier slid after the rouble sank 20 percent versus the dollar despite Russia’s central bank ramping up interest rates overnight to 17 percent from 11.5 percent.
“Since the rally (in gold), the rouble has recovered some, and things seem to have stabilized a bit,” Simon Weeks, head of precious metals at the Bank of Nova Scotia, said.
“$1,200 an ounce still seems to be pivotal, and gold is going to be volatile ahead of the FOMC.”
U.S. gold futures for February delivery were down $13.40 an ounce, or 1.1 percent, to settle at $1,194.30.
Silver was down 2.5 percent at $15.71 an ounce, after sliding 5 percent on Monday. Platinum was down 1.2 percent at $1,190.509 an ounce and palladium was down 2.1 percent at $778.60 an ounce. (Additional reporting by Manolo Serapio Jr. in Singapore and Jan Harvey in London.; Editing by Michael Urquhart and Meredith Mazzilli)