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PRECIOUS-Gold falls ahead of U.S. data-heavy week, Fed chair decision

* Dollar headed toward second straight monthly gain

* Spot gold on track for second monthly decline

* GRAPHIC-2017 asset returns: http://tmsnrt.rs/2jvdmXl

(New throughout, updates prices, market activity and comment; adds second byline and NEW YORK dateline) NEW YORK/LONDON, Oct 31 (Reuters) - Gold prices fell on Tuesday as the U.S. dollar was firm for much of the session and precious metals investors turned cautious ahead of central bank meetings this week, U.S. payrolls data and the announcement of the next U.S. Federal Reserve chair.

Spot gold slipped 0.4 percent to $1,270.40 an ounce

monthly decline.

U.S. gold futures for December delivery settled down

$7.20, or 0.6 percent, at $1,270.50 per ounce, a 1 percent monthly decline. The dollar was flat, initially underpinned by solid U.S. data, but on track for its second straight monthly increase.

The Fed started a two-day policy meeting during Tuesday's session with speculation mounting that Trump will pick Fed Governor Jerome Powell as the next head of the U.S. central bank on Thursday. Powell is seen as more dovish than other contenders for the post, such as Stanford University economist John Taylor.

"Somebody from within the Fed, even if theyre more dovish, might be less bullish for gold, because they would be seen as being better suited to manage monetary policy," said Jeffrey Christian, managing partner of CPM Group in New York. That could result in a stronger U.S. dollar, he added, which typically makes dollar-priced gold more expensive for holders of other currencies. The Fed is scheduled to release its statement following its meeting on Wednesday at 2 p.m. EDT. Market participants were awaiting the Bank of England policy meeting on Thursday and more data, including U.S. payrolls figures on Friday. Meanwhile, global equities were heading for a record 12th month of gains as a 5-1/2-month high in European stocks and records elsewhere underscored one of the most robust bull markets on record. Rising equity markets usually indicate confidence in economic growth, which reduces gold's appeal as a safe-haven asset. "The market is catching its breath for what will be a very data-heavy second half of the week," said Jeffrey Halley, a senior market analyst with OANDA. "Gold itself appears to have lost any risk-aversion premium for now and is thus completely at the mercy of the nuances of the U.S. bond and stock market, and by default the U.S. dollar."

Among other precious metals, silver fell 0.7 percent

to $16.71 an ounce, but headed toward a 0.5 monthly increase.

Platinum dipped 0.1 percent to $915.24 an ounce, though

poised for a nearly 0.8 percent monthly increase. Palladium climbed 1.6 percent to $980 an ounce, on track for a 4.8 percent monthly gain.

(Additional reporting by Vijaykumar Vedala in Bengaluru; editing by David Goodman and David Gregorio)