Gold struggles below $1,200 as equities, dollar gain

SINGAPORE (Reuters) - Gold was stuck below $1,200 an ounce on Monday, struggling to get past last week's losses, hurt by a stronger dollar and equities which dulled the metal's safe-haven appeal, and expectations of higher U.S. interest rates.

FUNDAMENTALS

* Spot gold was little changed at $1,194.95 an ounce by 0023 GMT, after losing about 2 percent last week on worries over a U.S. interest rate hike next year.

* The Federal Reserve, after wrapping up a two-day meeting last Wednesday, signalled it was on track to increase rates next year but said it was taking a patient stance, keeping gold's losses in check.

* Higher interest rates would hurt non-interest-bearing bullion, which was boosted by central bank liquidity and a low interest rate environment in the years following the 2008 financial crisis.

* Also weighing on gold was the strength in equities. Asian shares and the dollar began a holiday-shortened week on a strong footing on Monday, with the euro testing two-year lows against the greenback. [MKTS/GLOB]

* Trading activity was likely to be thin this week, with many investors away for Christmas and the run-up to the New Year's holiday.

* Hedge funds and money managers cut their net long positions in gold and silver futures and options in the week to Dec. 16, a period of choppy trade amid volatility in the dollar and oil prices, U.S. government data showed Friday.

* More recent data about clues on investor positioning shows that holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.41 percent to 724.55 tonnes on Friday. [GOL/ETF]

* Russia's gold reserves climbed to 38.2 million troy ounces as of Dec. 1 from 37.6 million troy ounces a month earlier, the central bank said on Friday.

MARKET NEWS

* The euro probed fresh two-year lows early on Monday in a subdued start to a holiday-shortened week, extending a multi-month trend of weakness against the dollar that many traders say will remain intact in the new year.

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