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PRECIOUS-Gold lower on strong shares, dollar keeps it over $1,300/oz

* European shares bounce back as Ukraine tensions ease

Dollar steadies, low U.S. Treasury yields weigh

* Eyes on Jackson Hole meeting later in week

(Updates throughout, changes dateline from SINGAPORE)

By Clara Denina

LONDON, Aug 18 (Reuters) - Gold edged lower on Monday as European shares rebounded on easing tensions in Ukraine, but a flat dollar and depressed U.S. Treasury yields limited losses and kept the metal's prices above the $1,300 mark.

Russia's Foreign Ministry said on Monday "certain progress" was achieved during talks between Russia, Germany, France and Ukraine in Berlin on Sunday about ways to end the military conflict in eastern Ukraine.

Spot gold fell 0.1 percent to $1,303.29 by 0953 GMT, while U.S. gold futures for December delivery were down by the same margin at $1,304.40.

The dollar was flat against a basket of currencies after a sixth straight weekly loss, while the yield on the benchmark 10-year U.S. Treasury note was close to a 12-month low hit the previous week.

Returns from U.S. bonds are closely watched by the gold market, given that the metal pays no interest.

The market was awaiting the annual meeting of central bankers in Jackson Hole on Thursday for clues about the timing of interest rate increases, while Federal Reserve chief Janet Yellen was due to speak on Friday.

The U.S. central bank is expected to raise rates in the middle of next year, depending on the strength of the economy. Higher interest rates would encourage investors to withdraw money from non-interest-bearing assets such as gold.

Standard Bank analyst Walter de Wet said the market was not expecting any shift in the Fed's strategy this week.

"This $1,284-$1,300 range is providing very good support ... with the market pretty much pricing in most of the political tensions."

European shares rallied as the threat of wider conflict in Ukraine seemed to diminish, although the situation remained delicate.

Tensions in Ukraine and the Middle East have largely contributed to gold's near 8 percent gain this year, igniting bouts of demand when investors turned to assets perceived as an insurance against risk. However, any impetus these events has provided has not lasted long, analysts said.

Hedge funds and money managers boosted their bullish bets on gold futures and options for the first time in three weeks, data from the Commodity Futures Trading Commission showed on Friday.

"Gross short positions are at their lowest since December 2012. This underscores the fragility of prices ... given the absence of a sustained significant move higher amid rising geopolitical tensions and a lack of bearish interest in gold," Barclays said in a note.

Gold also continued to miss support from physical demand in major buyers China and India, which has been weak as many consumers expected prices to fall further.

Persistently soft buying from Asia has stoked worries that buying will fail to pick up in the second half of the year, when it is normally stronger, bullion traders and dealers said.

Among other precious metals, silver was unchanged on the day at $19.61 an ounce, platinum fell 0.4 percent to $1,446.10 an ounce, while palladium hit a fresh 13-year high of $895.75 an ounce on fears over supply from top producer Russia.

(Additional reporting by A. Ananthalakshmi in Singapore; editing by David Clarke)