Gold inches lower as U.S. dollar steadies

(Reuters) - Gold edged lower early Tuesday on a firmer U.S. dollar, but held not far off levels touched in the previous session when it rose more than 1 percent on geopolitical tensions over the Korean peninsula.

FUNDAMENTALS

* Spot gold fell 0.1 percent to $1,308.90 per ounce at 0038 GMT. In the previous session, it rose over 1 percent to register its biggest intra-day percentage gain since Sept. 7.

* U.S. gold futures for December delivery rose 0.1 percent to $1,312.60 per ounce.

* The U.S. dollar rose against a basket of six currencies on Monday, with the euro hit by election results in Germany and investor jitters about a warning against hasty policy shifts by the European Central Bank president. [USD/]

* Germany's Angela Merkel began the tough task of trying to build a government on Monday after securing a fourth term as chancellor, urging the centre-left Social Democrats not to shut the door on a re-run of their "grand coalition".

* North Korea's foreign minister said on Monday President Donald Trump had declared war on North Korea and that Pyongyang reserved the right to take countermeasures, including shooting down U.S. bombers even if they are not in its air space.

* Stocks fell on Wall Street and U.S. government bond yields dropped after North Korea accused the United States of having declared war on the isolated country, while the euro fell after German elections showed support for Chancellor Angela Merkel's conservative party fell to its lowest since 1949. [MKTS/GLOB]

* A last ditch Republican effort to repeal Obamacare appeared doomed late on Monday after Senator Susan Collins became the third Republican senator to announce opposition to the bill.

* Japanese Prime Minister Shinzo Abe said he would dissolve parliament's lower house on Thursday for a snap election, seeking a mandate to stick to his tough stance towards a volatile North Korea and rebalance the social security system.

* Minneapolis Fed President Neel Kashkari said on Monday that he sees no need for the U.S. Federal Reserve to raise interest rates further as he sees no evidence recent weak inflation data is set to improve.

(Reporting by Nithin Prasad in Bengaluru; Editing by Richard Pullin)