* Gold holds decline from 3-day losing streak
* Dollar strength hurts
* Coming up: U.S. housing starts at 1230 GMT (Updates prices)
By A. Ananthalakshmi
SINGAPORE, Oct 20 (Reuters) - Gold struggled after three days of losses on Tuesday, hurt by a stronger dollar and fears the Federal Reserve could still raise U.S. interest rates this year.
Spot gold XAU= was trading at $1,171.75 an ounce by 0653 GMT, after losing about 1.2 percent in the past three sessions.
Gold touched a 3-1/2-month high last week on bets the Fed would not raise U.S. rates amid concerns about the global economy. But the rally lost steam after robust U.S. economic data, and as gold failed to break past the key $1,200-level.
"There has been more uncertainty in recent days about the timing of a rate hike, and that is not helping gold," said a trader in Sydney. "We are just taking cues from the dollar."
The dollar was trading near its highest in over a week against a basket of major currencies. A stronger greenback makes gold expensive for holders of other currencies. USD/
"Technically, things aren't very good at the moment as we broke below the 200-day moving average near $1,175," the trader said.
Gold may break support at $1,168 and fall towards the next support level at $1,155, said Reuters technicals analyst Wang Tao. urn:newsml:reuters.com:*:nL3N12K15P
Investors have been frustrated by the mixed messages from the U.S. central bank in recent weeks.
Fed Chair Janet Yellen and other officials have said they expect a rate hike will be needed by the end of this year, but two Fed governors last week urged caution. The Fed has kept interest rates near zero for nearly seven years.
Despite strong headwinds from overseas that are holding down U.S. inflation, the Fed should soon begin to raise interest rates to slow economic growth before it becomes unsustainable, San Francisco Fed President John Williams said on Monday. urn:newsml:reuters.com:*:nL1N12J1MR
The Fed holds two more policy meets this year: next week and in December. Market expectations for a rate hike have shifted to next year in recent weeks, though some haven't completely ruled out a hike in December.
"The key factor driving the (gold) price is the market's expectations with respect to the Fed's first interest rate hike," Commerzbank (DE:CBKG) analysts said in a note. "We only envisage a sustained price rise once the uncertainty over the first rate hike has dissipated."
It expects to see gold at $1,150 by the end of the year.
PRICES AT 0653 GMT
Metal
Last
Change Pct chg
Spot gold
1171.75
1.45
0.12 Spot silver
15.87
0.05
0.32 Spot platinum
1005
-4
-0.4 Spot palladium
681
-1.5
-0.22 Comex gold
1172.5
-0.3
-0.03 Comex silver
15.89 0.049
0.31
COMEX gold and silver contracts show the most active months