* Dollar index hits two-month highs, European shares up
* Gold on track for longest losing streak in 14 months
* Silver, platinum hit lowest in seven weeks
(Updates throughout, changes dateline from BENGALURU)
By Clara Denina
LONDON, May 30 (Reuters) - Gold fell below $1,200 for the
first time since mid-February on Monday, as comments from
Federal Reserve chief Janet Yellen on the likelihood of higher
U.S. interest rates sent the dollar to two-month highs.
The Fed should increase interest rates "in the coming
months" if the economy picks up as expected and jobs continue to
be generated, Yellen said on Friday, bolstering the case for a
rate hike in June or July.
St. Louis Fed President James Bullard said on Monday that
global markets appear to be "well-prepared" for a summer rate
hike, although he did not specify a date for the policy move.
An increase in rates would raise the opportunity cost of
holding gold, which does not earn interest. It would also
bolster the dollar, making gold more expensive for other
currency holders.
Gold XAU= fell as much as 1.1 percent to $1,199.60 an
ounce, its lowest since Feb. 17, and was down 0.6 percent at
$1,204.18 an ounce by 0853 GMT. The metal was on track for nine
sessions of losses, its longest losing streak of since March
2015.
Trade was thinning out with public holidays in Britain and
the United States on Monday.
"The (next technical) support is at $1,185 and a break of
this level will open the floor towards the $1,160 mark," said
Naeem Aslam, chief market analyst at Think Forex UK.
"Money managers are reducing their bullish bets and ...hedge
funds are strongly bullish on the dollar... the momentum chase
trade (in gold) is dissipating."
Gold's losses were due to a stronger dollar and one-month
highs in European shares, which showed increased risk appetite
among investors. MKTS/GLOB
"Much will depend on what the dollar will do on Tuesday when
all markets resume trading," INTL FCStone analyst Edward Meir
said in a note.
Bullion, which had risen 16 percent in the first quarter,
has been under pressure since the prospect of an imminent rate
hike was indicated by the Fed's April meeting minutes, which
were released earlier this month. Key central bank officials
have consistently supported an increase.
Investors will now monitor the all-important U.S. non-farm
payrolls for May, due on Friday, and a solid reading could
heighten expectations for a June rate rise.
"Traders have lost their interest... (as) Yellen's comment
strengthened the view that the Fed will increase the interest
rate this year," Aslam said.
Among other precious metals, spot silver XAG= and spot
platinum XPT= touched seven-week lows.
Silver was down 2.1 percent at $15.88 per ounce, while
platinum fell 0.4 percent to $968.10 and palladium XPD= was
unchanged at $537.05 per ounce.