* Gold rises within $3/oz of Monday's 5-month high
* Dollar index drops to 3-week low
* U.S. 10-year Treasury yields at 5-month trough (Recasts with updates prices; adds comment, second byline, NEW YORK dateline)
By Marcy Nicholson and Maytaal Angel
NEW YORK/LONDON, April 18 (Reuters) - Gold turned higher on Tuesday, nearing the prior session's five-month peak, bolstered by a softer dollar, lower U.S. Treasury yields, North Korea tensions and nervousness ahead of the French presidential election.
The dollar index .DXY fell to a three-week low on disappointing U.S. housing starts data and nerves over trade talks between the United States and Japan, while Britain's pound soared after Prime Minister Theresa May called for a snap general election. USD/
May's call added to a lengthening list of uncertainties for investors already on edge over geopolitical tensions that also include Syria, Afghanistan, Turkey and U.S. relations with Russia and China. risk is skewed to the downside but underlying support is there with the focus on political uncertainties. We see the yen continuing to strengthen, and a strong yen and strong gold have gone hand-in-hand since November," Saxo Bank's head of commodity strategy Ole Hansen said.
"Also expectations about the dollar are up for revision, the strong dollar story is fading. (U.S. President Donald) Trump is talking it down and we're seeing weakness creep into U.S. data, changing the perception of how much rates have to rise."
A weaker dollar makes dollar-priced gold cheaper for non-U.S. investors. U.S. 10-year Treasury yields fell to a five-month low, also a source of support for gold prices.
Spot gold XAU= turned up 0.6 percent to $1,291.98 an ounce by 3:12 p.m. EDT (1912 GMT), just below the prior session's peak at $1,295.42, its highest since Nov. 9.
U.S. gold futures GCcv1 settled up 0.2 percent at $1,294.10.
In France, investors remained nervous ahead of the first round of the country's presidential election this Sunday, even though an opinion poll put centrist Emmanuel Macron first, just ahead of far-right, anti-euro candidate Marine Le Pen.
"Investors appear very reluctant to part with gold," said Julius Baer in a note.
Ryan McKay, associate commodities strategist for TD Securities in Toronto, said he does not expect gold prices to extend gains much above $1,300.
"The Fed is still probably on course to hike two more times this year," McKay said.
"Until something fundamentally happens to change the Fed expectations or something happens with North Korea or the likes of that, we think it's capped at this $1,290-$1,300 resistance."
Spot silver XAG= fell 0.3 percent to $18.32 per ounce, while platinum turned down 0.2 percent to $977.60 per ounce. Spot palladium fell 2.1 percent to $771.80, having hit its lowest since March 17 earlier at $769.80.