* Dollar hits 3-1/2-month peak ahead of Fed
* Platinum slides to lowest since mid-December
* GRAPHIC-2018 asset returns: http://tmsnrt.rs/2jvdmXl
(Updates throughout, adds LONDON dateline) LONDON, May 1 (Reuters) - Gold slid to a six-week low on Tuesday as the dollar strengthened ahead of a U.S. Federal Reserve policy meeting this week, which is being watched for clues on the future pace of interest rate hikes. The metal also looks vulnerable after breaking through key chart support in the $1,320/1,317 area, its 100-day moving average and a key retracement of its January to March decline, technical analysts said.
Spot gold was down 0.4 percent at $1,309.41 an ounce
at 0950 GMT, off an earlier low of $1,307.81, its weakest since
March 20. U.S. gold futures for June delivery were 0.7
percent lower at $1,310.20. The dollar hit a 3-1/2-month high versus the euro ahead of the Fed meeting starting on Tuesday and moved into positive territory for the year against a basket of major currencies, having surged on a recent rally in bond yields. "Investors are buying dollars and this is adding pressure on gold," ActivTrades analyst Carlo Alberto de Casa said. "(The)dollar index jumped above 92, while markets are seeing growing chances for a fourth hike in 2018. Almost 50 percent of traders (are) expecting a fourth raise by the end of the year." While the U.S. central bank is widely expected to stand pat on policy for now, market participants will be closely watching the two-day meet for hints of an interest rate hike in June.
Rising interest rates tend to weigh on gold, as they increase the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced. Ultra-low rates were a key factor driving gold to record highs in the wake of the global financial crisis. Gold now looks vulnerable to further losses after breaking through key support levels, according to technical analysts, who study past price patterns to predict the direction of trade. "MACD (moving average convergence-divergence) and momentum indicators highlight downside risk and I remain bearish on gold, targeting 1,304.30, the 200-day moving average," ScotiaMocatta said in a note.
Silver was down 0.2 percent at $16.28 an ounce, while palladium was 0.2 percent lower at $962.70 an ounce. Platinum was down 0.6 percent at $897.74 an ounce.
The white metal used in autocatalysts and jewellery dipped earlier in the session to $892.10, its lowest since Dec. 18. It was the biggest faller among major precious metals last month, sliding 2.7 percent in a third straight monthly loss.
(Additional reporting by Eileen Soreng in Bengaluru; Editing by Dale Hudson)