* Gold faces technical resistance around $1,330/oz
* Fed rate hike in Sept seen off the agenda (Updates prices; adds comment, second byline, NEW YORK dateline)
By Marcy Nicholson and Pratima Desai
NEW YORK/LONDON, Sept 14 (Reuters) - Gold prices rose on Wednesday, breaking a five-day decline as the dollar slipped against a basket of currencies, with the market waiting for clues on the timing of an increase in U.S. interest rates.
Spot gold XAU= was up 0.4 percent at $1,323.50 an ounce by 3:00 p.m. EDT (1900 GMT). It touched $1,315.27 on Tuesday, the lowest in more than a week. U.S. gold futures GCcv1 settled up 0.18 percent at $1,326.10.
Expectations that the U.S. Federal Reserve will raise rates next week have receded, putting pressure on the dollar, which when it falls makes gold cheaper for holders of other currencies. FRX/
"The big picture is the Fed rate hike, which is going to be the biggest factor for gold, so in the short term markets will be looking at U.S. data," Natixis analyst Bernard Dahdah said.
"It's all about the opportunity cost of holding gold. Higher interest rates make it more expensive to hold gold, which has zero yield."
Markets are pricing in just a 15 percent chance that the Fed will hike U.S. interest rates during its Sept. 20-21 meeting, according to CME FedWatch. Many now expect a rise in December after the U.S. presidential election. Sachs puts the chances of a rate hike in December at 40 percent. believe any decision to raise rates in 2016 will ultimately be viewed as a misstep that increases financial and economic risks, and this will be to gold's benefit," said Joe Foster, portfolio manager and strategist of VanEck International Investors Gold Fund in New York.
"In the meantime, however, the anticipation of a rate increase and any attendant U.S. dollar strength could cause gold to struggle," he added.
UBS Wealth Management Research said in a note that it held its three-month price range at $1,275-$1,425 an ounce, but raised its six- and 12-month forecasts to $1,350.
"Gold is open to setbacks in the short term, given the elevated long speculative positioning and pessimistic rates markets," UBS said.
Technically, initial resistance comes in around $1,330, near the 21-day moving average.
"Gold is approaching the important $1,300-$1,310 support zone, which has held incredibly well since the Brexit rally and will be a key focus for traders in the short term," said Alex Thorndike, senior precious metals dealer at MKS PAMP Group.
Spot silver XAG= was up 0.9 percent at $19.02 an ounce.
Platinum XPT= gained 0.2 percent at $1,034.20, while palladium XPD= rose 0.8 percent to $656.90.