* U.S. consumer spending, inflation data support Fed hike case
* Political uncertainty in Europe stokes safe-haven buying
* Spot gold, silver touch one-month peaks
* GRAPHIC-2017 asset returns: http://tmsnrt.rs/2jvdmXl
(Recasts; adds comments, U.S. economic data, updates prices) NEW YORK/LONDON, May 30 (Reuters) - Gold prices eased after hitting a one month high on Tuesday as economic data from the United States showed increased signs that the Federal Reserve would raise interest rates next month. U.S. consumer spending recorded its biggest increase in four months in April and monthly inflation rebounded, pointing to firming domestic demand that could allow the Federal Reserve to raise interest rates next month. The metal, often seen as an alternative investment during times of political and financial uncertainty, earlier in the session touched a one-month high as it benefited from a risk-averse mood in global markets along with the Japanese yen and U.S. Treasuries.
Spot gold touched a one-month high of $1,270.47
before pulling back 0.3 percent to $1,262.76 per ounce by 2:15
p.m. EDT (1815 GMT). U.S. gold futures slipped to end
the session 0.5 percent lower at $1,262.1 an ounce. "While U.S. inflation data released May 30 (broadly in line with expectations) and the U.S. employment report is due on 2 June are where the market will be looking for guidance on the Fed's monetary policy, price risks in both directions could arise from the UK election (June 8) and the FOMC meeting (June 14)," Standard Chartered analysts said in a note. "Our economists continue to expect a 25 (basis points) Federal Reserve hike in June while the market is pricing in an 84 percent probability of such a hike." Gold is highly sensitive to higher rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced. Investors have been concerned about next week's election in Britain, as well as the prospect of early elections in Italy and worries over Greek debt, which analysts said supported gold and dented stocks. A poll in Britain on Tuesday showed Prime Minister Theresa May's lead over the opposition Labour Party dropping to six percentage points ahead of the election on June 8. "Ideally to see a rally in the (stock) markets the UK would want to see Theresa May win by an overwhelming majority which seems to be less likely to happen taking into account the latest polls," Natixis precious metals analyst Bernard Dahdah said. "If May wins with her current lead it will be slightly negative for her negotiation hand (in Brexit talks) and ... positive for gold." In Italy, former prime minister Matteo Renzi suggested on Sunday that the country's next election be held at the same time as Germany's. Germany will vote on Sept. 24, while elections are due in Italy by May 2018. Euro zone finance ministers' failure to agree on Greek debt relief with the International Monetary Fund last week also added to risk aversion. Forex.com market analyst Fawad Razaqzada said the focus for bullion this week was U.S. non-farm payrolls due on Friday. "I expect the dollar to continue to strengthen this week until Friday's jobs data release, therefore I think gold is going to go down from here," Razaqzada said.
Among other precious metals, silver marked its
highest level since April 27 at $17.47 an ounce. It was last down 0.12 percent at $17.35.
Palladium was up 0.91 percent at $804.25 after
hitting the highest since May 16 at $807.70 an ounce. Platinum was down 1.24 percent at $940.70 an ounce.
(Additional reporting by Nithin ThomasPrasad and Vijaykumar Vedala in Bengaluru; editing by Jane Merriman and Chizu Nomiyama)