* Dollar rises ahead of Fed meeting
* Holdings of SPDR Gold Trust rose 0.83 pct on Monday
* Coming up: Fed statement Wednesday at 1800 GMT
(Updates prices; adds comment, second byline, NEW YORK
By Marcy Nicholson and Maytaal Angel
NEW YORK/LONDON, March 14 Gold prices were
little changed on Tuesday as an expected U.S. interest rate hike
boosted the dollar and weighed on the precious metal, but
political risks in Europe provided safe-haven support.
The dollar index climbed, making dollar-priced gold
costlier for non-U.S. investors.
With a rate increase by the Federal Reserve seen as a done
deal, investor focus is shifting to what message the U.S.
central bank will deliver when it concludes its meeting on
Wednesday. In December the Fed forecast three rate rises this
Gold is highly sensitive to rising interest rates, which
increase the opportunity cost of holding non-yielding bullion
while boosting the dollar, in which it is priced.
Spot gold was down 0.2 percent at $1,201.54 an ounce
by 2:59 p.m. EST (1859 GMT), as investors took a wait-and-see
approach ahead of the Fed meeting. U.S. gold futures
settled down 0.04 percent at $1,202.60.
"Typically, once we get the reality of the rise, the dollar
starts to ease off a little and gold tends to recover, and
that's exactly what we're expecting this time," said George
Milling-Stanley, head of Gold Strategy at State Street Global
"There's a lot out there that's pretty favorable to gold and
that's the uncertainty out there," Milling-Stanley added,
referring to upcoming European elections.
Gold hit a five-week low on Friday but recovered quickly
after a U.S. non-farm payrolls report failed to meet elevated
expectations, weighing on the dollar. Gold's brisk recovery on
Friday underlined its resilience, ABN Amro analyst Georgette
"We see some stabilization (in gold). The Fed hikes are
roughly priced in. Real yields are not rising that fast.
Therefore, gold is protected on the downside," Boele said.
Elsewhere, investors were focusing on Wednesday's Dutch
elections, which have been boosting gold's safe-haven appeal.
The anti-Islam Party for Freedom is seen as having little
chance of coming to power, but a strong election performance for
the group would fuel worries over a surprise result in French
presidential elections in April and May.
In Britain, concerns have increased over a second Scottish
independence referendum and the triggering of Article 50, which
would formally begin British negotiations to leave the European
Holdings of SPDR Gold Trust , the world's largest
gold-backed exchange-traded fund, rose 0.83 percent on Monday.
Silver edged down 0.2 percent to $16.91 an ounce,
platinum dipped 0.1 percent to $934.74 and palladium
was down 1.3 percent at $741.20.
(Additional reporting by Arpan Varghese in Bengaluru; Editing
by David Goodman and Richard Chang)