* Investors eye Fed, BOJ meetings after last week's ECB
* Gold inches up after Friday's drop from 13-month peak
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC
(Releads, updates prices, adds comment)
By Jan Harvey
LONDON, March 14 (Reuters) - Gold steadied on Monday, paring
earlier gains as stock markets and the dollar gained, with moves
muted ahead of closely watched policy meetings of U.S. and
Japanese central banks this week.
The metal, which is highly sensitive to monetary policy and
resulting currency moves, bounced to a 13-month high on Friday
after the European Central Bank signalled an end to rate cuts,
pushing the euro sharply higher versus the dollar.
It later fell back to post its biggest one-day loss in
nearly a month, and struggled to gain traction on Monday as U.S.
and European stocks rose and the dollar climbed 0.3 percent
versus the euro.
Spot gold XAU= was little changed at $1,248.66 an ounce at
1442 GMT, off an earlier high of $1,260.71.
"The expectation is for the market to go through a period of
consolidation before moving ahead," said Ross Norman, chief
executive of Sharps Pixley.
The Federal Reserve's two-day policy meeting, starting on
Tuesday, will be watched for clues on the future pace of U.S.
rate increases after the central bank hiked rates for the first
time in nearly a decade in December.
"We don't have the certainty that many had in the last two
years that we would see a rate hike this year," Norman said.
"We'll wait for the Bank of Japan and the Fed to make their
announcements before we have any real clarity on that."
Further U.S. rate hikes could lift the opportunity cost of
holding non-yielding bullion, while boosting the dollar, in
which it is priced. The metal has risen 18 percent this year as
expectations for further near-term hikes faded.
Investors are also keeping a watch on the Bank of Japan
meeting. The BOJ's policy board is set to discuss this week
whether to exempt $90 billion in short-term funds from its newly
imposed negative interest rate.
Hedge funds and money managers increased their bullish
position in COMEX gold to the highest in 13 months in the week
to March 8, U.S. Commodity Futures Trading Commission data
showed on Friday, as safe-haven buying lifted prices to the
highest since February 2015.
"This was the eighth increase in net long positions in the
last nine weeks," Commerzbank (DE:CBKG) said in a note. "Since the
beginning of the year, the equivalent of 481 tons of gold have
thus been purchased via the futures market."
U.S. gold futures GCv1 for April delivery were down $9.60
an ounce at $1,249.80.
Silver XAG= was up 0.5 percent at $15.54 an ounce, while
platinum XPT= was up 0.2 percent at $962.24 an ounce and
palladium XPD= was down 1 percent at $566 an ounce.
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