By Marcy Nicholson and Pratima Desai
NEW YORK/LONDON (Reuters) - Gold prices slipped on Monday as the dollar rose and equities climbed, but political and economic uncertainties in the United States and Europe are expected to provide support for now.
The spot price was down 0.7 percent at $1,225.71 an ounce by 2:51 p.m. EST (1951 GMT), falling further below last week's three-month high of $1,244.67. U.S. gold futures settled down 0.8 percent at $1,225.80.
The dollar hit a two-week high against the yen as investors focused again on the U.S. reflation trade which dominated in the aftermath of Donald Trump's election as U.S. President in November, but has stalled this year.
A higher U.S. currency makes dollar-denominated commodities more expensive for holders of other currencies, potentially subduing demand.
A gauge of global equity markets advanced and bond yields rose.
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In Europe, national elections this year starting with the Netherlands at the end of March make for an uncertain political outlook.
The first round of the presidential elections in France follows in April, with the possibility of a victory for Marine Le Pen of the National Front arousing much uncertainty.
"Support for gold because of politics will hold this side of the French election," said Danske Bank analyst Jens Pederson.
"Le Pen's comments on euro membership are very much on the radar."
Le Pen has rattled investors by promising to take France out of the euro zone and to hold a referendum on EU membership.
"Global uncertainty from the U.S., Europe and on the Korean front will drive global prices high again," said Geofin Comtrade Ltd's head of research, Hareesh V.
North Korea said on Monday it had successfully test-fired a new type of medium-to-long-range ballistic missile the previous day, claiming advances in a weapons program it is pursuing in violation of U.N. resolutions.
"Against soft physical demand for gold, the market remains fixated upon the U.S., for now," Standard Chartered Global Research said in a note.
"Our economists believe a March (U.S. interest) rate hike is unlikely and they do not think the Fed is in a rush to hike rates again."
Strong demand for gold can be seen on COMEX, where speculators raised their bullish gold bets to a two-month high, U.S. government data showed on Friday.
Meanwhile silver eased 0.7 percent to $17.83 per ounce, while platinum lost 1.2 percent to $998.50 per ounce.
Palladium was down 1.4 percent at $773.25 per ounce, after reaching the highest since Jan. 25 at $786.90.
(Additional reporting by Arpan Varghese and Nallur Sethuraman in Bengaluru; Editing by Ruth Pitchford and James Dalgleish)
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