Gold steady near seven-week highs as dollar stumbles

BENGALURU, August 1 (Reuters) - Gold prices held steady near seven-week highs early Tuesday, supported by political uncertainty and a slump in dollar, after registering their biggest monthly gain in five months in July.

FUNDAMENTALS

* Spot gold was nearly flat at $1,268.88 per ounce at 0040 GMT. It rose 2.2 percent last month, its biggest monthly gain since February. * U.S. gold futures for August delivery were also almost unchanged at $1,267.50 per ounce.

* The U.S. dollar hit a more than 2-1/2-year low against the euro on Monday on month-end portfolio adjustments and expectations for a more hawkish European Central Bank, and touched a more than six-week low against the yen on concerns over low U.S. inflation. [USD/]

* The Kremlin has ordered the United States to cut about 60 percent of its diplomatic staff in Russia but many of those let go will be Russian citizens, softening the impact of a measure adopted in retaliation for new U.S. sanctions.

* Contracts to buy previously owned U.S. homes rebounded in June after three straight monthly declines, but the housing market remained constrained by a shortage of properties available for sale.

* China hit back on Monday after U.S. President Donald Trump tweeted he was "very disappointed" in China following North Korea's latest missile test, saying the problem did not arise in China and that all sides need to work for a solution.

* The automatic right of European Union citizens to live and work in Britain will end in March 2019 with Brexit, Prime Minister Theresa May's spokesman said on Monday, after her ministers publicly differed over the shape of the divorce with the EU.

* The U.S. Mint sold 16,500 ounces of American Eagle gold coins in July, up from 6,000 ounces the previous month, according to the latest data.

* London's precious metals vaults held 7,449 tonnes of gold worth $298 billion and 32,078 tonnes of silver worth $19 billion as of March 31, the London Bullion Market Association (LBMA) said on Monday, publishing such data for the first time.

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