PRECIOUS-Gold slips as focus turns to U.S. stimulus outlook
* Fed policy meeting on June 18-19
* Dollar index, stocks rise
* India gold volumes drop, China still strong
(adds quotes, updates prices)
LONDON, June 17 (Reuters) - Gold dropped on Monday as the dollar rose broadly and stock markets rebounded, with investors keeping a sharp eye on this week's U.S. Federal Reserve meeting for signals on the latest plans for its bond buying programme.
The Fed meets on Tuesday and Wednesday against a backdrop of stronger-than-expected data on U.S. retail sales and the job market, leading to speculation that its monthly stimulus could be trimmed.
"You could really argue that sellers have the upper hand at the moment because some recent dollar weakness hasn't really lent support to gold," Saxo Bank senior manager Ole Hansen said.
Spot gold shed half a percent to $1,383.20 an ounce by 1433 GMT. On Friday, bullion closed up about half a percent for the week, helped by strong demand for coins and bars, a pullback in U.S. stocks and rising tensions in the Middle East.
U.S. gold was down 0.4 percent at $1,380.09.
"People are looking for more clarity - or not, as the case may be - on whether the Fed starts to ease off the Quantitative Easing bandwagon," SocGen analyst Robin Bhar said.
"We think that all the ingredients are in place with an economy that looks to be improving, albeit gradually," he added.
Any easing of the bond-buying programme, which raises the prospect of eventual rate tightening, is seen as unfavourable for bullion, because it raises the opportunity cost of holding a metal that earns no interest.
Markets have been volatile since Fed Chairman Ben Bernanke said last month the bank could scale back its stimulus measures, but bank officials have since given out conflicting signals.
Most economists expect the Fed to scale back the size of its bond purchases by year-end.
Gold prices were supported by some buying in China, the second-biggest consumer of bullion after India. Shanghai gold futures were up 0.2 percent on Monday.
However, demand in Asia has cooled from peak levels seen after the mid-April sell-off in gold. Bullion is down 17 percent for the year to date after 12 years of annual gains.
Indian purchases of gold have fallen since an import duty increase earlier this month. The government is trying to narrow its current account deficit by reducing gold imports.
Victor Thianpiriya, commodities analyst at Australia and New Zealand Banking Group, said volumes to India have fallen significantly in the past two weeks.
Hedge funds and money managers slashed their bullish bets in gold and silver futures and options in the week to June 11, a report by the Commodity Futures Trading Commission showed on Friday.
In other metals, silver fell 1.1 percent, having failed to vault $22 an ounce, while platinum was down 0.3 percent and palladium lost 1.7 percent.
(Additional reporting by A. Ananthalakshmi; Editing by Anthony Barker)