By Jan Harvey
LONDON (Reuters) - Gold retreated from the previous session's near three-week high on Monday as strength in stocks and the dollar dampened a rally fuelled by the Federal Reserve's decision last week to keep U.S. interest rates on hold.
European stocks climbed 0.6 percent on Monday, while the dollar rose against a basket of currencies after speculation that other major central banks may ease policy after the Federal Reserve delayed an interest rate hike.
Spot gold was down 0.5 percent at $1,133.30 an ounce at 1402 GMT, while U.S. gold futures for December delivery were down $4.80 an ounce at $1,133.00.
Gold held in a narrow range earlier this month on uncertainty over whether the Fed would hike rates for the first time in nearly a decade, lifting the opportunity cost of holding non-yielding bullion while potentially boosting the dollar.
It rose sharply after the Fed shied away from a hike on Thursday, peaking at $1,141.50 the following day, but has now retreated below that level.
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With the Fed still expected to hike rates before the end of the year, gold could come under pressure again.
"My personal feeling is that the Fed still wants to raise rates and still expects to, but that there is still considerable uncertainty over the timing," Mitsui Precious Metals analyst David Jollie said. "While the market expects rates to rise, any upside for gold should be somewhat limited."
U.S. Commodity Futures Trading Commission data showed on Friday that hedge funds and money managers slashed their net long position in COMEX gold to a five-week low in the week ended Sept. 15, just before the Fed policy meet, while increasing their short positions.
Silver was up 0.2 percent at $15.20 an ounce, while platinum was down 1.2 percent at $967.25 an ounce and palladium was down 0.1 percent at $602.72 an ounce.
China's platinum imports rose 16 percent in August, official customs data showed on Monday, while palladium imports fell nearly 37 percent and silver imports more than doubled.
"The silver price is clearly finding support from China again," Commerzbank said in a note, adding that last month's imports of 353 tonnes "constituted the highest imports since February 2014".
(Additional reporting by A. Ananthalakshmi in Singapore; editing by Louise Heavens and William Hardy)