* Dollar slips against basket of major currencies
* Fed meeting seen as next big factor for gold prices
* GRAPHIC-Asset returns: http://link.reuters.com/dub25t
(Adds comment, byline, NEW YORK dateline; updates prices)
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, Sept 8 (Reuters) - Gold firmed on Tuesday
as a retreat in the dollar index helped the metal snap a
four-day losing streak, but bullion remained close to 3-week
lows as uncertainty over a looming U.S interest rate hike
persisted.
Spot gold XAU= was up 0.2 percent at $1,121.10 an ounce at
2:56 p.m. EDT (1856 GMT), while U.S. gold futures GCv1 for
December delivery settled down 40 cents at $1,121 an ounce.
Spot prices hit their lowest since mid-August on Monday, at
$1,116.20 an ounce, after Friday's hotly anticipated U.S.
payrolls data failed to provide clarity on the timing of the
Federal Reserve's first interest rate rise in nearly a decade.
Expectations for rising rates, which would lift the
opportunity cost of holding non-yielding bullion while boosting
the dollar, have pushed the metal 5 percent lower this year and
remain gold's biggest driver, analysts said.
Trade is expected to be rangebound ahead of the Fed's next
policy meeting on Sept. 16-17.
"Last week everyone was waiting for the non-farm payrolls
data, and this week everyone's waiting for the FOMC (meeting) on
the 17th," said MKS' head of trading Afshin Nabavi.
"Investors need some kind of assurance on direction before
getting into the market."
Stock markets worldwide rallied on hopes of more stimulus
measures in China and on strong German trade data, while copper
and silver rallied after Glencore (LONDON:GLEN) announced plans to shut down
its loss-making copper mines. MKTS/GLOB MET/L
The U.S. dollar .DXY fell as much as 0.5 percent.
"It's just optimism in all the markets as a result of China
taking some action in the markets," said Phillip Streible,
senior commodities broker for RJO Futures in Chicago, referring
to the session's strength in gold.
"I don't think gold bulls or bears know what to do at this
point, $1,120 is kind of a comfort zone."
Gold has failed to attract strong investor interest as a
safe haven despite the recent weakness in stocks due to worries
over the Chinese economy, showing that the metal is struggling
to find direction outside U.S. monetary policy.
Silver XAG= was up 1.2 percent at $14.73 an ounce, while
platinum XPT= was up 1.7 percent at $1,000 an ounce and
palladium XPD= was up 1.9 percent at $586.25 an ounce.
The platinum market deficit shrank in the second quarter,
data from the World Platinum Investment Council showed, as
rising mine supply and autocatalyst and jewellery recycling
outstripped a much smaller increase in demand. ID:nL5N11D33L