* Gold little changed for the month
* Silver falls after hitting one-month high on Tuesday
By Maytaal Angel
LONDON, May 31 Gold edged higher on Wednesday as
the dollar dipped and simmering geopolitical tensions lent
support, though the metal was largely unchanged for the month
amid an increased chance of a U.S. interest rate rise next
The dollar edged lower versus a currency basket, with
sterling recovering after a poll showed Britain's ruling
Conservatives still leading ahead of elections next week. A
previous projection indicated a hung parliament.
The dollar's losses were limited by U.S. economic data this
week that supported the case for a Federal Reserve interest rate
hike next month.
Higher rates reduce demand for non-interest bearing bullion
and boost the U.S. currency, making dollar-priced gold costlier
for non-U.S. investors.
"The market has been over-enthusiastic in terms of the
weakness (seen in gold). Once the rate hike happens, people will
focus on political uncertainty and on the physical support (for
gold)," said Hamza Khan, head of commodities strategy at ING.
"Fundamentally, we favour the upside. We see prices at
$1,350 (an ounce) for the third quarter and $1,250 for the
Spot gold edged up 0.4 percent to $1,267.6 per ounce
at 12:20 EDT (1620 GMT). It closed 0.3 percent lower on Tuesday
after rising to a one-month high of $1,270.47. For the month,
bullion is largely unchanged.
U.S. gold futures were up 0.36 percent at $1,266.70.
Traders see an 86.6 percent chance of a 25-basis-point rate
hike at the Fed's June 13-14 policy meeting, Thomson Reuters
But some market participants said signs of softness in some
economic data have raised questions about whether the U.S.
central bank can keep to its plan to hike interest rates two
more times this year and begin shrinking its balance sheet.
The investigations into alleged Russian meddling in the 2016
U.S. election and Moscow's possible collusion with members of
Donald Trump's campaign also have clouded the prospect of a rate
hike next month. Investors fear the probes could hamper the
Trump administration's push for tax cuts and other stimulus
"Precious metals remain supported on the back of a weaker
dollar overnight. The range is likely to hold ahead of Friday’s
(U.S.) employment numbers," KITCO METALS INC said in a note.
In other trading of precious metals, silver slipped
0.2 percent to $17.32 an ounce, though it was 0.8 percent higher
for the month.
Platinum was up 1.2 percent at $945.5 an ounce after
falling 1.9 percent in the previous session in its biggest
one-day percentage loss in nearly a month.
Palladium was up 1.6 percent at $817.9 an ounce.
(Additional reporting by Devika Krishna Kumar in New York;
Vijaykumar Vedala in Bengaluru; Editing by David Evans and Paul