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PRECIOUS-Gold extends rally to 6-yr peak on weaker dollar, U.S.-Iran spat

Karthika Suresh Namboothiri

* Gold at six-year high, gains for 6th straight session

* Dollar dips to three-month low

* Palladium touches three-month high of $1,548.03/oz (Adds comments, details, updates prices)

June 25 (Reuters) - Gold prices surged to a five-year high on Tuesday, extending gains for a sixth straight session, on the back of expectations of monetary easing by the U.S. Federal Reserve and a subdued dollar.

Brewing tensions between the United States and Iran helped prop up the price of gold, which is often picked as a hedge against risk during political and economic uncertainties.

Spot gold rose nearly 1% to $1,432.42 per ounce as of 10:03 a.m. EDT(1403 GMT). Prices had touched $1,438.63 in the session, a level last seen in May 2013.

U.S. gold futures gained 1.3% to $1,436.00 per ounce.

"Once these uptrends start, they dont come to an end overnight. It feeds on itself, and that means you could have a new trading range," said George Gero, managing director at RBC Wealth Management, who now sees gold trading between $1,375 and $1,450 in the short term.

"People have been buying what they feel could be an additional haven on more upcoming volatility caused by global economic pullback, the tinder box of the Middle East with Iran, and the G20, which may not bring the (trade) deal with China that everybody is expecting."

Equities traded lower due to Iran tensions and trade worries, while demand for the dollar dipped to three-month lows against major currencies on expectations the Federal Reserve would cut interest rates this year.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, and bullion has gained nearly $100 in value since the Fed's statement last week that hinted at monetary easing.

U.S. President Donald Trump imposed sanctions on Iran's Supreme Leader Ayatollah Ali Khamenei and other top officials on Monday, prompting Tehran to call it an end of diplomacy, lifting demand for safe-haven gold.

Investors also watched for further cues on trade negotiations between Washington and China, with Trump expecting to meet one-on-one with at least eight world leaders at the G20 summit in Japan, including China's President Xi Jinping and Russian President Vladimir Putin.

Indicating investor interest in gold, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.37% on Monday, after posting their biggest percentage gain in nearly 11 years on Friday.

Other precious metals also gained, with platinum UP 1.2% at $819.53 per ounce, while silver inched marginally higher to $15.43.

Palladium rose 0.4% to $1,541.78 an ounce after hitting its highest since March 27 at $1,548.03 earlier in the session.

(Reporting by Karthika Suresh Namboothiri in Bengaluru; editing by Jonathan Oatis)