By Marcy Nicholson and Clara Denina
NEW YORK/LONDON (Reuters) - Gold was little changed on Monday, hovering just below the prior session's near three-week top as investors cut expectations for a U.S. interest rate hike in the near term.
Palladium and platinum, however, fared better, hitting their highest in more than a year on improved investor sentiment.
Spot gold > was up 0.2 percent at $1,353.29 an ounce by 2:43 p.m. EDT (1843 GMT). Bullion hit $1,355.10 on Friday, its highest since July 12, after much slower-than-expected U.S. economic growth weighed on the dollar.
U.S. gold futures for December
"The Fed passed on a July rate hike, the dollar softened and the market is not pricing a rate hike now. For the moment that is all positive for gold," Citigroup strategist David Wilson said.
Palladium extended last month's 19 percent rise, gaining 1.8 percent to a 13-month high of $722.70 an ounce.
"Palladium price performance has outshined gold (quarter-to-date) in light of specific macro and supply/demand data that have been positive for the platinum group metal," said Citi Research in a note.
"Funds have room to get longer the palladium market, in our view."
Platinum >, which gained 12 percent last month, rose 1.6 percent to a 14-month top at $1,161.20.
Silver > touched a three-week high of $20.64 an ounces, and is up 47 percent since the start of the year, outpacing gains in the rest of the precious metals complex.
The U.S. Federal Reserve gave no hints of any near-term interest rate rise as some had expected it to at its monthly policy meeting last week. Early on Monday, New York Fed President William Dudley said the central bank should be cautious on interest rate increases due to lingering risks to the U.S. economy.
Top U.S. Fed policymakers held varying opinions about rate hikes.
Gold is highly sensitive to rising U.S. interest rates, as the opportunity cost of holding the non-yielding asset increases.
The dollar <.DXY> rose 0.2 percent against a basket of six currencies, crawling away from its lowest since July 5 hit on Friday. Global equity prices steadied near their highest in almost a year.
"Although equities are performing well, there is concern that that might be topping out, while the lack of clarity over the Fed's interest rates policy is providing a negative real yield environment that favours gold," ETF Securities analyst Martin Arnold said.
Markets will closely monitor this week's data, which includes the monthly non-farm payrolls report on Friday.
(Additional reporting By Nallur Sethuraman in Bengaluru; Editing by William Hardy and Marguerita Choy)
