* Dollar slips further from 2018 peak hit last week
* Spot gold looks neutral in $1,317-$1,326/oz - technicals
* Speculators raise net long position in week to May 8
(Adds comment, updates prices)
By Apeksha Nair
BENGALURU, May 14 (Reuters) - Gold prices rose on Monday on the back of a subdued dollar as investors considered the prospects of fewer interest rate hikes in the United States this year.
Spot gold XAU= was up 0.2 percent at $1,320.80 per ounce as of 0643 GMT, after marking the highest since April 26 at $1,325.96 in the previous session.
U.S. gold futures GCcv1 for June delivery were little changed at $1,320.80 per ounce.
"Investors are watching the U.S. bonds and the dollar closely and taking cue from there for the direction of gold price," said Joshua Rotbart, managing partner, J. Rotbart & Co in Hong Kong.
The dollar eased 0.1 percent to 92.456 versus a basket of six major currencies .DXY , retreating further from its 2018 peak hit last week on the back of sagging U.S. yields, after softer economic data curbed prospects of aggressive rate hikes in the United States. Louis Federal Reserve Bank President James Bullard on Friday spelled out the case against any further interest rate increases, saying rates may already have reached a "neutral" level that is no longer stimulating the economy. U.S. central bank is still, however, widely expected to raise benchmark interest rates at its next policy meeting in June.
Gold is highly sensitive to rising U.S. rates as these tend to boost the dollar and push bond yields up, adding pressure on the greenback-denominated, non-yielding bullion.
While gold prices were also drawing support from political uncertainty in the Middle East, investors said easing tensions elsewhere could add downside risks to prices. geopolitical point of view we are currently in an equilibrium between the prospects of 'good end' in the Korean peninsula against looming conflict in the Middle East between Iran and Israel. The price (of gold) reflects this balance," Rotbart said.
Spot gold looks neutral in a range of $1,317-$1,326 per ounce, Reuters technical analyst Wang Tao said.
Holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, fell 0.62 percent to 857.64 tonnes on Friday. raised their net long position in COMEX gold, by 636 contracts to 52,621, in the week to May 8, U.S. Commodity Futures Trading Commission (CFTC) data showed. other precious metals, silver XAG= was up 0.6 percent at $16.71 an ounce, after hitting a 2-1/2-week high in the previous session.
Platinum XPT= rose 0.4 percent to $924.70 per ounce, having hit its peak since April 25 at $929.10 on Friday.
Palladium XPD= was 0.4 percent lower at $992.05 per ounce, after hitting a 2-1/2-week high at $1,008.50 on Friday.