* Risk the Fed could surprise on rates
* Rise in bond yields a worry for gold bulls
* Strong technical support around $1,305 an ounce (Updates prices)
By Pratima Desai and Sethuraman N R
LONDON, Sept 19 (Reuters) - Gold prices rose on Monday as the dollar slipped but gains were capped by jitters ahead of a U.S. Federal Reserve monetary policy meeting and a rise in U.S. government bond yields.
Spot gold XAU= was 0.4 percent higher at $1,315.05 an ounce at 1347 GMT compared with a low of $1,306.26 hit on Friday, its weakest since Sept. 1. U.S. gold futures GCcv1 rose 0.6 percent to $1,318.1 an ounce.
The U.S. central bank meets on Tuesday and Wednesday. It is expected to keep benchmark rates on hold but could give a clear signal of rises to come, possibly in December. rates remain unchanged, that could keep the U.S. currency under pressure, potentially making gold more attractive to buy. But higher rates would increase the opportunity cost of holding gold that yields nothing. FRX/
"The dollar overall is down a little, which is positive for precious metals and for gold in particular ... Economic data has not been too good, so they do not need to act immediately," said Quantitative Commodity Research analyst Peter Fertig.
"But there is a risk the Fed could surprise and that would have negative consequences for precious metals."
Also worrying for gold bulls is the rise in real yields, such as those earned on U.S. inflation-linked bonds, making it harder to justify holding gold. US/
It is "concerning that the recent move higher in bond yields has also seen a move higher in real yields," Macquarie analysts wrote in a note. "Gold has in fact stood up well so far ... The recent rise in real yields is more consistent with a gold price nearer $1,250/oz than today's $1,315/oz."
However, the return of Chinese investors after the Mid-Autumn Festival is expected to help bolster gold, as is strong technical support around $1,305, the 100-day moving average.
Another plus is investor buying of physical gold, which can be seen in the holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, which rose more than one percent to 942.61 tonnes on Friday. GOL/ETF
But offsetting that was data from the U.S. Commodity Futures Trading Commission showing hedge funds and money managers cutting their net long positions in COMEX gold contracts in the week to Sept. 13. other precious metals, spot silver XAG= rose 2.8 percent to $19.18 an ounce, while platinum XPT= gained 0.3 percent to $1,018.00, off Friday's 2-1/2-month low of $1,005. Palladium XPD= was up 1.6 percent at $682.3.