Gold slips on U.S. Fed rate views; July minutes in focus

By Sethuraman N R

(Reuters) - Gold edged lower on Wednesday as hawkish comments from U.S. Federal Reserve officials raised bets on a rate hike this year, with traders waiting for minutes from the last Fed policy meeting for more clues.

New York Fed President William Dudley said a rate hike in September was possible, while Atlanta Fed President Dennis Lockhart said the U.S. economy is likely strong enough for at least one rate increase before the end of 2016, with two a possibility.

Spot gold was down 0.3 percent at $1,341.84 an ounce at 0654 GMT. The precious metal rose 0.5 percent on Tuesday.

U.S. gold fell 0.7 percent to $1,346.80 an ounce.

"The comments (on rate hikes) are certainly pricing on gold," said ANZ analyst Daniel Hynes.

Gold investors, however, have held relatively well despite these issues cropping up, indicating a broader level of support for this market, Hynes added.

Spot gold looks neutral in a range of $1,333.50-$1,358.01 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.

Markets will seek fresh direction from comments expected from St. Louis Fed President James Bullard and the release of the Fed's July policy meeting minutes later in the session, as macro economic data from the world's largest economy has been mixed so far.

"While the next round of Fed rate hike is not seen far ahead, there is higher possibility of a break down into $1,200-1,215 for gold," said Moses Harding, an independent strategist in financial services and global markets and an advisor to board at SBM Holdings Ltd, Mauritius.

The dollar edged away from 7-week lows against the yen and euro on Wednesday. The dollar index was up 0.2 percent at 94.989 after losing 0.8 percent on Tuesday, which was a 7-week trough.

A stronger dollar discourages gold buying by making the metal more expensive for holders of other currencies.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.19 percent to 962.23 tonnes on Tuesday.

Silver fell 0.3 percent to $19.71 an ounce on Wednesday.

Platinum was down 0.2 percent at $1,110, while palladium fell 0.5 percent to $696.50.

(Reporting By Nallur Sethuraman in Bengaluru; Editing by Joseph Radford and Biju Dwarakanath)