(Adds close of U.S. markets)
* European stocks slip on weak German business sentiment
* Dollar index falls to three-month low
* S&P edges down with decline in healthcare stocks
* Gold flirts with Friday's six-year high
By Herbert Lash
NEW YORK, June 24 (Reuters) - Global equity markets traded mostly flat on Monday as investors awaited U.S.-China trade talks the end of this week at the G20 summit, and the dollar fell to three-month lows on bets the Federal Reserve may cut interest rates more than once this year.
European stocks stumbled on fears of an escalation in Iran tensions, which also kept gold prices near a six-year high. U.S. President Donald Trump targeted Iranian Supreme Leader Ayatollah Ali Khamenei and other Iranian senior officials with new sanctions on Monday.
Earlier in China, shares closed higher on hopes of a thaw in the U.S.-China trade dispute, which has been blamed for slowing global growth. The blue-chip CSI300 index rose 0.2%, and the Shanghai Composite Index also gained 0.2%.
Chinese state media said on Sunday that President Xi Jinping will attend the G20 summit in Osaka, Japan, in the first official confirmation of his attendance at a gathering where he is expected to meet with Trump.
On Wall Street, the S&P 500 closed slightly lower as healthcare companies lost ground. The technology-rich Nasdaq also fell while the Dow industrials edged higher.
Stocks are unlikely to push much higher without progress on U.S.-China trade or a Fed rate cut, said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.
"Until we get that G20 meeting and start to get some feedback from the (Trump) administration, it's going to be tough to go higher," he said.
MSCI's gauge of equity performance around the globe gained 0.05%. In Europe, the FTSEurofirst 300 index of leading regional shares closed down 0.25% on weak German economic data and a profit warning from Mercedes-Benz maker Daimler.
German business morale fell in June to its lowest level since November 2014, an Ifo institute survey showed, adding weight to expectations that Europe's largest economy contracted in the second quarter. Germany's DAX index fell 0.53%.
On Wall Street, the Dow Jones Industrial Average rose 8.41 points, or 0.03%, to 26,727.54. The S&P 500 lost 5.11 points, or 0.17%, to 2,945.35, and the Nasdaq Composite dropped 26.01 points, or 0.32%, to 8,005.70.
The dollar softened against a basket of currencies on bets the Fed may lower rates more than once this year, while U.S.-Iranian tensions provided safe-haven support for the yen.
The dollar index fell 0.22% and the euro rose 0.25% to $1.1394. The Japanese yen rose 0.04% versus the greenback at 107.34 per dollar.
Interest rate futures implied traders have priced in a 100% chance the Fed will cut rates at its next policy meeting at the end of July, with a high probability for two additional rate cuts, according to CME Group's FedWatch program.
U.S. Treasury yields fell, holding just above almost three-year lows. The benchmark 10-year U.S. Treasury note rose 13/32 in price to push yields down to 2.0211%.
The glum German data pushed down bond yields across the euro zone and reinforced expectations for an ECB rate cut.
In developing markets, the Turkish lira strengthened as much as 2% after Turkey's main opposition won a re-run election in Istanbul for mayor on Sunday, a blow to President Tayyip Erdogan. The lira later pared gains.
Bitcoin pulled back from 15-month highs after jumping more than 10% over the weekend. Analysts said the gains came amid growing optimism over the adoption of cryptocurrencies after Facebook announced its Libra digital coin.
Brent crude, the international benchmark, fell on concerns about the possibility of weakening demand after large gains last week caused tensions between the United States and Iran.
Benchmark Brent crude fell 34 cents to settle at $64.86 a barrel, while U.S. crude futures rose 47 cents to settle at $57.90 a barrel.
Gold prices rose more than 1 percent to a near six-year peak as the dollar fell, with safe-haven bullion also boosted by Trump's announcement of fresh sanctions on Iran. U.S. gold futures settled up 1.3% at $1,418.20 an ounce.
Reporting by Herbert Lash; Editing by David Gregorio and Leslie Adler