* Gold slips back after rising 0.7 pct on Wednesday
* Stocks extend gains, dollar held in narrow range
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC (Updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Feb 18 (Reuters) - Gold eased on Thursday as a run higher in equities tempered upward momentum in the precious metal, though uncertainty over the direction of U.S. monetary policy supported prices above $1,200 an ounce.
The dollar and gold, which is highly sensitive to U.S. rate rises, were stuck in narrow ranges after minutes of the Federal Reserve's last meeting released on Wednesday provided few fresh clues on the rate of U.S. rate hikes this year. FRX/
Stock markets also firmed in Europe after a positive session in Asia overnight, and as benchmark Brent crude oil prices rose 1 percent. Sharp losses in oil and stocks drove gold to a one-year high at $1,260.60 an ounce last week. MKTS/GLOB
Spot gold XAU= was down 0.4 percent at $1,204.11 an ounce at 1032 GMT, while U.S. gold futures GCv1 for April delivery were down 0.6 percent at $1,204.30.
"Stocks have been rising for three days, so there seems to be a fair degree of calmness now in the markets," Societe Generale (PA:SOGN) analyst Robin Bhar said. "That's reflected in the fact that more risky assets are moving higher and gold is out of the limelight."
Inflows into gold-backed exchange-traded funds, whose holdings have already risen this year by more than they fell in the whole of 2015, showed investor appetite has sharpened.
"At the moment there's enough support in terms of negative interest rates, and further flows into ETFs, to suggest that for the time being as gold consolidates, dips will be well supported," Bhar said. "There's still huge debate about how the Fed will approach interest rate increases."
Minutes from the Fed's last policy meeting showed policymakers still expected to raise rates this year and even discussed a hike at the Jan. 26-27 policy meeting, but they were divided over how to interpret financial market volatility. tends to benefit from lower rates, which cut the opportunity cost of holding non-yielding assets.
"The January FOMC minutes show members were concerned about weakening growth in foreign economies and turbulence in global financial markets," HSBC said in a note.
"They were unable to agree on what these developments implied for the domestic U.S. economy, only that uncertainty had increased and that downside risks were on the rise."
Silver XAG= was down 0.4 percent at $15.22 an ounce, while platinum XPT= was down 0.3 percent at $938.35 an ounce.
Palladium XPD= was down 0.4 percent at $509.10 an ounce.
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