Gold rises on dovish Fed; poised for best quarter in nearly 30 years

SINGAPORE (Reuters) - Gold ticked up on Thursday, helped by a softer dollar and Federal Reserve Chair Janet Yellen's caution over higher U.S. interest rates, but gains were capped by a rally in global equities.

The metal was set to record its strongest three-month performance in nearly 30 years in the first quarter, bolstered by safe-haven demand.

FUNDAMENTALS

* Spot gold had risen 0.2 percent to $1,226.66 an ounce by 0045 GMT.

* The metal had gained nearly 2 percent on Tuesday immediately after Yellen's dovish remarks, but fell 1.4 percent the following session as stronger equities triggered profit-taking.

* Asian shares climbed on Thursday, taking early cues from Wall Street gains overnight, as receding worries of near-term U.S. interest rate hikes continued to buoy risk sentiment. The dollar hovered near seven-week lows versus the euro.

* Yellen said on Tuesday the U.S. central bank should proceed only cautiously as it looks to raise interest rates.

* The comments boosted sentiment with investors, who had sold off equities after some Fed officials said recently that another rate hike could be just around the corner. The Fed raised rates in December for the first time in nearly a decade.

* Gold as a non-interest yielding asset benefits from lower rates.

* For the quarter, gold has gained 15.6 percent, its best such performance since the third quarter of 1986.

* Gold prices rallied at the beginning of the year as worries over global economic growth and a slowdown in China shook up stock markets, triggering safe-haven demand for the yellow metal. Receding rate hike expectations also helped.

* Assets in SPDR Gold Trust , the world's top gold-backed exchange-traded fund, fell for a second straight session to 819.28 tonnes on Wednesday. Holdings are still near their highest in over two years.

(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)