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PRECIOUS-Gold slips as equities, dollar surge ahead of Fed meeting

* Dollar hovers near 8-week high against yen

* Fed expected to unveil plans to trim balance sheet

* Specs raise net longs for ninth straight week

(Recasts, updates prices, adds quote/details; changes dateline) LONDON, Sept 18 (Reuters) - Gold hit a two and a half week low on Monday as the dollar rose ahead of a two-day Federal Reserve meeting and as global equities surged. The dollar hit an eight-week high against the yen as data showing a pick up in U.S. consumer prices increased bets that the Fed could raise rates again in December. Also, investors expect the Fed will announce plans to start trimming its balance sheet at its meeting on Tuesday and Wednesday, a move that should support the dollar. World stocks hit a record high ahead of the Fed meeting, with investors favouring risky assets to perceived safe havens like gold.

Spot gold was down 0.3 percent at $1,314.41 an ounce

31.

U.S. gold futures for December delivery fell 0.5

percent to $1,318.50. "Gold could fall below $1,300 in the short term but the question remains how people perceive the U.S. economy and the need for higher interest rates," said Ole Hansen, head of commodity strategy at Saxo Bank. "At this stage there's still not a strong view the U.S. economy will accelerate. That should keep interest rates at a manageable level and provide some support for gold." Investors currently put a December rate hike at less than a

50 percent probability in the futures market .

Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding the non-yielding asset, while boosting the dollar, in which it is priced. On the political front, investors largely brushed aside concerns after a relatively quiet weekend in the Korean peninsula. U.S. Ambassador to the United Nations Nikki Haley said on Sunday the U.N. Security Council has run out of options on containing North Korea's nuclear program and the U.S. may have to turn the matter over to the Pentagon. Data showed speculators raised their net long position in COMEX gold contracts for the ninth straight week, bringing it to a one-year high in the week to Sept. 12 and leaving gold vulnerable to profit taking.

Silver slipped 0.4 percent to $17.51 an ounce, after

earlier hitting its lowest since Sept. 1.

Platinum dipped 0.1 percent to $966.30, while palladium gained 1.1 percent to $933.47.

(Additionaly reporting by Apeksha Nair and Arpan Varghese. Editing by Jane Merriman)