* Dollar hits 3-1/2-month peak ahead of Fed
* Platinum slides to lowest since mid-December
* GRAPHIC-2018 asset returns: (Recasts; updates headline, prices; adds comment, byline, NEWYORK to dateline)By Renita D. Young and Jan HarveyNEW YORK/LONDON, May 1 (Reuters) - Gold slid to a four-monthlow on Tuesday as the dollar strengthened ahead of a U.S.Federal Reserve policy meeting that is being watched for clueson the future pace of interest rate hikes.Bullion also looks vulnerable after breaking through chartsupport in the $1,320/1,317 area, its 100-day moving average anda key retracement of its January to March decline, technicalanalysts said.
Spot gold was down 0.7 percent at $1,305.72 by 1:37p.m. EDT (1737 GMT), off an earlier low of $1,301.51, itsweakest since Dec. 29. U.S. gold futures for Junedelivery settled down $12.40, or 0.9 percent, at $1,306.80 perounce.
The greenback hit a 3-1/2-month high versus the euro aheadof the Fed meeting starting on Tuesday and moved into positiveterritory for the year against a basket of currencies. "Gold is down, since the dollar is up ahead of the Fedmeeting," said Josh Graves, senior market strategist at RJOFutures. "You've also got four (possible) rate hikes this year -bullish for the dollar, bearish for gold."While the U.S. central bank is widely expected to stand paton policy for now, market participants will be closely watchingthe two-day meet for hints of an interest rate hike in June. Rising interest rates typically weigh on gold, as theyincrease the opportunity cost of holding non-yielding assetssuch as bullion, while boosting the dollar, in which it ispriced. Ultra-low rates were a key factor driving gold to recordhighs in the wake of the global financial crisis.Global political tensions about the Korean Peninsulacontinued to fade, pressuring gold prices, Graves said.Investors see the metal as a store of value during times ofpolitical and economic duress.
Gold now looks vulnerable to further losses after breakingthrough key support levels, according to technical analysts, whostudy past price patterns to predict the direction of trade.
"MACD (moving average convergence-divergence) and momentumindicators highlight downside risk and I remain bearish on gold,targeting 1,304.30, the 200-day moving average," ScotiaMocattasaid in a note.
Silver shed 1.2 percent to $16.11 an ounce, earlierhitting $16.04, a more than four-month low. Palladium declined 2.3 percent to $942.60 an ounce, earlier touching$939.47, a three-week low.
Platinum dropped 1.2 percent to $892.10 an ounce. Thewhite metal used in autocatalysts and jewelry dipped earlier inthe session to $888.50, its lowest since Dec. 18. It was thebiggest faller among major precious metals last month, sliding2.7 percent in a third straight monthly loss.
(Additional reporting by Eileen Soreng in Bengaluru; editing byMark Potter and Susan Thomas)