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PRECIOUS-Gold dips as investors gauge rate hike prospects

       * Shares and bonds hit after Swiss and U.S. rate hikes
    * Gold stuck in range-bound trade
    * Safe-haven demand for gold could fade further - analyst

 (Updates prices)
    By Arundhati Sarkar
    June 16 (Reuters) - Gold prices eased on Thursday, as the
non-yielding metal's appeal was dented by the U.S. Federal
Reserve's biggest interest rate hike since 1994 to tame
inflation, with other central banks likely to follow suit.
    Spot gold        slipped 0.2% to $1,830.40 per ounce by 1310
GMT. U.S. gold futures        rose 0.6% to $1,830.60.
    Gold erased small gains earlier in the session driven by a
slight dip in the dollar index       , which was still near
recent two-decade highs.
    "The current higher interest rate environment has put a
damper on gold demand despite the real inflation threat," said
Vincent Tie, sales manager at dealer Silver Bullion.
    Bullion was hemmed into a range after Wednesday's bounce,
which was spurred by a retreat in the dollar and yields after
the Federal Reserve's rate increase.
    While gold is considered an inflation hedge, higher rates
and bond yields increase the opportunity cost of holding
non-yielding bullion.
    "It's a real head-scratcher for traders at the moment to
work out what exactly will drive gold out of this range," said
Michael McCarthy, chief strategy officer at Tiger Brokers, in
    Analysts say gold's moves lately have been influenced by the
dollar and rate hike projections, rather than safe-haven flows,
with bullion also moving in tandem with equity markets on
    Global stocks fell as sentiment was hit by the Swiss
National Bank raising its policy rate for the first time in 15
years with a surprise 50 basis point hike.
    Gold's safe-haven demand could fade further if the Fed
successfully fights inflation without pushing the U.S. into a
recession, said Carsten Menke, head of Next Generation Research
at Julius Baer.
    Elsewhere, platinum        rose 0.3% to $942.61 per ounce,
while palladium        fell 0.4% to $1,852.79.
    Silver shed 0.1% to $21.62.

 (Reporting by Arundhati Sarkar and Bharat Govind Gautam in
Bengaluru; Editing by Aditya Soni and Amy Caren Daniel)

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