By Marcy Nicholson and Jan Harvey
NEW YORK/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 fueled by the Federal Reserve's decision last week to keep U.S. interest rates on hold.
Wall Street and European stocks rebounded more than 1 percent in rallies that, along with gains in the dollar and global oil markets, pointed to a tentative recovery in investor confidence after the Federal Reserve delayed an interest rate hike.
Spot gold was down 0.5 percent at $1,132.80 an ounce at 3:06 p.m. EDT (1906 GMT), while U.S. gold futures for December delivery settled down 0.4 percent at $1,132.80 per ounce.
"The weaker euro and a little recovery in the equity markets has robbed it (gold) of a bit of its steam," said James Steel, chief metals analyst for HSBC Securities in New York.
"The fact that the Fed didn't raise rates last week is going to lend some sort of long-term support to the market."
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.
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."
Later in the session, Atlanta Fed President Dennis Lockhart said that the six weeks until the Fed's next meeting in October may not be enough time to quell concerns about the global economy and possible risks to the U.S. recovery.
Silver rose 0.1 percent at $15.17 an ounce, while platinum was down 1.3 percent at $966.25 an ounce and palladium was up 1.3 percent at $610.75 an ounce.
China's platinum imports rose 16 percent in August, 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.
(Additional reporting by A. Ananthalakshmi in Singapore, editing by William Hardy and Andrew Hay)
