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PRECIOUS-Gold hits 1-week high on dollar, political uncertainty

* Physical holdings in gold ETFs fall since Fed rate rise

* Gold resistance at $1,260/oz, 55-day moving average

(Recasts, adds comment, changes dateline from Bengaluru) LONDON, June 23 (Reuters) - Gold prices climbed to one-week highs on Friday, boosted by a lower dollar and economic and political uncertainty around the world, but the prospect of further interest rate rises in the United States limited gains.

Spot gold was up 0.6 percent at $1,257.1 an ounce at

0903 GMT after earlier touching $1,258.00, its highest since

June 14. U.S. gold futures rose 0.7 percent to $1,257.8.

However, gold is little changed from last week. "The broad story is the tug of war between the Fed, which seems determined to push on with monetary tightening and reducing its balance sheet and political uncertainty," said Danske Bank analyst Jens Pederson. Allegations of ties to Russia have cast a shadow over U.S. President Donald Trump's first five months in office, North Korea testing a rocket engine and Brexit negotiations are all fuelling concern about global stability. "Political noise out of Washington regarding Trumps ties with Russia is unlikely to provide lasting support to gold while an escalation of the geopolitical tensions with North Korea is a bullish wild card," Julius Baer analysts said in a note. "Facing higher interest rates and a stronger dollar, we still see gold prices weakening towards $1,200 per ounce over the coming months." Gold is often used by investors as a hedge against political and financial uncertainty. But it doesn't earn interest, dividends or coupons and it costs money to insure and store. A rising U.S. currency makes dollar-denominated metals more expensive for holders of other currencies, which potentially could subdue demand. The Fed's rate rise on June 14 saw investors sell gold. Holdings of the largest gold-backed exchange-traded-fund (ETF),

New York's SPDR Gold Trust , have fallen to 27.456 million

ounces from 27.875 million ounces on June 13. On the technical side, the first upside barrier comes in around $1,260 near the 55-day moving average. That is followed moving average at $1,249 provides strong support.

Elsewhere, silver gained 1.4 percent to $16.75 an ounce, platinum climbed 1.2 percent to $931.9 an ounce

and palladium rose 0.8 percent to $891.25.

(Additional reporting by Nithin Prasad and Vijaykumar Vedala in Bengaluru; Editing by Mark Potter)