* Dollar eases, but still supported by Fed rate hike
expectations
* Asian shares rise after solid session on Wall Street
(Adds comment, updates prices)
By Koustav Samanta
BENGALURU, May 23 (Reuters) - Gold was steady on Monday as
the dollar eased and Asian stocks firmed, with the metal holding
near three-week lows on growing expectations the U.S. Federal
Reserve will hike interest rates as early as June.
Bullion has been under pressure since the Fed last week
released the minutes of its April meeting, which showed
officials believe the U.S. economy could be ready for another
interest rate increase next month.
Echoing those sentiments, Eric Rosengren, president of the
Federal Reserve Bank of Boston said on Friday that conditions
for a rate increase are "on the verge of broadly being met".
Gold is sensitive to interest rates, gains in which raise
the opportunity cost of holding non-yielding bullion.
Spot gold XAU= was down 0.1 percent at $1,250.60 per ounce
at 0644 GMT, still close to $1,244 touched last week, the lowest
since April 28. U.S. gold futures GCcv1 dipped 0.1 percent to
$1,251.20.
The safe-haven asset found some support as the dollar fell
versus the yen on Monday, dragged lower by sliding Tokyo stocks
and data showing Japan logged a much larger-than-expected trade
surplus in April. USD/
But the greenback remains close to its highest in nearly two
months against a basket of major currencies reached last week,
supported by the Fed's rate hike expectations. USD/
"We see gold continuing to work lower over the course of the
coming week, as an upward trending dollar should continue to
weigh in on prices," said INTL FCStone analyst Edward Meir.
Asian shares rose on Monday after a solid session on Wall
Street, with MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS climbing 0.5 percent.
Some market analysts believe that investors are still
betting on a not-so-soon increase in U.S. interest rates,
reflected in the continued support for gold-backed exchange
traded funds.
"The Fed is unlikely to raise interest rates anytime soon
since it is an election year. Maybe after elections, unless we
have very strong U.S. economic data," said Ronald Leung, chief
dealer at Lee Cheong Gold Dealers in Hong Kong.
The U.S. presidential election is scheduled for November.
Holdings in the world's largest gold-backed ETF SPDR Gold
Trust GLD rose 1 percent to 869.26 tonnes on Friday, the
highest since November 2013. GOL/ETF
Among other precious metals, spot silver XAG= dropped 1
percent to $16.34 an ounce. Spot platinum XPT= inched down 0.4
percent to $1,013.74 per ounce and spot palladium XPD= fell
0.9 percent to $553.10 per ounce.