* Robust U.S. data supports case for near-term rate hike
* Palladium, silver, platinum edge off multi-week lows
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC (Updates prices, adds comment)
By Jan Harvey
LONDON, May 25 (Reuters) - Gold fell to a seven-week low on Wednesday after upbeat U.S. home sales data in the previous session boosted expectations that the Federal Reserve will press ahead with interest rate hikes in the near term.
The metal has fallen more than 4 percent since Fed meeting minutes last Wednesday revived expectations of an imminent rate increase. Gold is sensitive to rising interest rates, which increase the opportunity cost of holding non-yielding assets.
Spot gold XAU= was down 0.5 percent at $1,220.41 an ounce at 1415 GMT, off an earlier low of $1,217.25. U.S. gold futures GCv1 for June delivery were down $8.20 at $1,221.00.
"The economic data is firming up in the US and this is making the dollar stronger," Naeem Aslam, chief market analyst at Think Forex, said. "Traders are of the mind-set that the Fed will increase the interest rate in June."
The dollar hit a two-month high against a basket of currencies on Wednesday on expectations the Fed will raise rates in the near term, though it gave up gains against the euro on relief that there was progress in Greek bailout talks. FRX/
Growing confidence in a pick-up in U.S. economic growth was fed on Tuesday by data suggesting new U.S. single-family home sales have hit their highest in eight years. in the world's largest gold-backed exchange-traded fund, SPDR Gold Shares GLD , fell 3.9 tonnes on Tuesday to 868.66 tonnes, its first decline in a month. GOL/ETF
"It all does hinge on the Fed's intentions for June," Mitsubishi analyst Jonathan Butler said.
"We had surprisingly hawkish minutes last week which put the June rate rise back on the cards. That certainly has made life tough for gold, because the dollar's rallied, 2-year Treasury yields have rallied, even 10-year yields have rallied somewhat."
Price-sensitive gold buyers in Asia were active overnight, but were unable to consistently lift prices.
Elsewhere data from the International Monetary Fund showed regular official sector gold buyers China, Russia and Kazakhstan raised their bullion reserves again last month, while Venezuela sold off more of its holdings earlier this year. other precious metals, silver XAG= was up 0.8 percent at $16.33 an ounce, after dipping to a five-week low of $16.14 earlier in the session.
Palladium XPD= was down 0.5 percent at $528.50 an ounce, off a 12-week low of $520.60 reached earlier in the day. Platinum XPT= was at $992.75 per ounce, down 0.4 percent, after touching a five-week trough of $985.50.
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