PRECIOUS-Gold gains on dollar and shares; likely Fed rate rise weighs

* Fed expected to raise interest rates next week
* Investors monitor broader decline in commodity prices

(Updates prices; adds comment, second byline, NEW YORK
dateline)
By Marcy Nicholson and Clara Denina
NEW YORK/LONDON, Dec 8 (Reuters) - Gold rose on Tuesday as
the dollar receded slightly and stocks fell globally, though
expectations that the U.S. Federal Reserve will raise interest
rates next week kept gains in check.
A slide in commodity prices - particularly crude oil's drop
to its lowest in almost seven years as OPEC continues to pump
near-record amounts of oil to defend market share - also
prevented gold from reaching higher levels. O/R
Any further weakness in oil could trigger fears of
deflation, a bearish factor for gold, which is often used as a
hedge against oil-led inflation.
Spot gold XAU= rose 0.3 percent to $1,073.18 an ounce at
2:42 p.m. EST (1942 GMT), while U.S. gold futures GCcv1 for
February delivery settled up 10 cents at $1,075.30 an ounce.
Stock markets worldwide slipped, weighed down by weak China
trade figures, while the dollar .DXY was down 0.2 percent
against a basket of other leading currencies. MKTS/GLOB
Signs that the U.S. labor market is recovering supported
market views that the Fed will raise rates for the first time in
nearly a decade at its policy meeting on Dec. 15-16.
"For gold now it's just a wait and see game," said Saxo
Bank's head of commodity strategy Ole Hansen, adding that the
market is still preoccupied with the rate increase.
"At the same time, though, the market is not prepared to
react in terms of cutting exposure until we actually have the
news."
Georgette Boele, commodity strategist at ABN Amro, said
Tuesday's gains in gold would be short lived as they resulted
from bargain hunting on the back of a brief retreat in the
dollar.
"Our economists expect three Fed rate hikes of 25 basis
points each in 2016, which would not even be half as many rate
hikes as were implemented in the first year of the last cycle,"
said Commerzbank (DE:CBKG) in a note.
"Once the first Fed rate hike has taken place and the
associated uncertainty has abated, physical gold demand should
come to the fore again to a greater extent."
Assets in SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, tumbled to a 2008 low, while
central bank data showed China's gold reserves rose by nearly 21
tonnes last month.
Silver XAG= was down 0.6 percent at $14.14 an ounce.
Platinum XPT= fell 0.8 percent to $846.44 and palladium XPD=
was down 0.5 percent at $556.47.