* Gold gains for second day as dollar dips
* Geopolitical tensions trigger safe-haven bids
* Coming up: U.S. Weekly jobless claims, New home sales Oct (Updates prices)
By A. Ananthalakshmi
SINGAPORE, Nov 25 (Reuters) - Gold added to overnight gains on Wednesday on a softer dollar and heightened tensions after Turkey shot down a Russian warplane, but the rally was capped on expectations of a U.S. rate hike next month.
Turkey shot down the Russian jet near the Syrian border on Tuesday, saying the plane had violated its air space, in one of the most serious publicly acknowledged clashes between a NATO member country and Russia for half a century. urn:newsml:reuters.com:*:nL8N13J14S
U.S. President Barack Obama and French President Francois Hollande, meeting in Washington, urged against an escalation, while NATO Secretary-General Jens Stoltenberg said the military alliance stood in solidarity with Turkey.
The tensions triggered a sell-off in equities and the dollar, while boosting the safe-haven yen, gold and government debt. MKTS/GLOB
Spot gold XAU= edged up 0.3 percent to $1,078.61 an ounce by 0645 GMT, following a 0.6 percent gain on Tuesday. U.S. gold GCcv1 rose 0.5 percent, after a near 1 percent gain in the previous session.
"Gold rose on flight-to-quality as investors sought protection from volatile financial markets in the wake of global stresses," said HSBC analyst James Steel.
"While we think gold may be supported, we are not anticipating a robust rally, and look for only moderate gains, with a lot of upside resistance," he said.
Despite the gains, gold wasn't too far from a near-six-year low of $1,064.95 hit last week on increasing views that the Federal Reserve will hike U.S. rates next month for the first time in nearly a decade.
Gold tends to benefit from ultra-low U.S. rates, which lower the opportunity cost of holding non-yielding bullion.
Data on Tuesday supported views of a December rate hike. The U.S. economy grew at a healthier clip in the third quarter than initially thought. urn:newsml:reuters.com:*:nL1N13J0X2
Traders will be eyeing more U.S. data due later on Wednesday, including weekly jobless claims and October new home sales, to gauge the strength of the economy.
Liquidity, however, could be thin ahead of the U.S. Thanksgiving holiday on Thursday.
Among other precious metals, silver XAG= rose for a second session after dipping to a six-year low of $13.86 earlier this week, while platinum XPT= was trading just above a seven-year low.
Palladium XPD= rose nearly 1 percent to $540.65.
PRICES AT 0645 GMT Metal
Last
Change Pct chg
Spot gold
1078.61
3.5
0.33 Spot silver
14.22
0.02
0.14 Spot platinum
844.85
4.85
0.58 Spot palladium
540.65
4.93
0.92 Comex gold
1078.6
4.8
0.45 Comex silver
14.17
0.011
0.08
COMEX gold and silver contracts show the most active months