* Gold falls reversing earlier rally
* Wednesday's Fed meeting in focus
* Platinum, palladium gain ahead of outcome of wage talks
* Coming up: US consumer prices Tuesday
(Adds comment, updates market activity)
By Frank Tang and Clara Denina
NEW YORK/LONDON, June 16 Gold fell on Monday as
investors took profits after earlier hitting a near three-week
high on turmoil in Iraq which lifted the metal's safe-haven
Platinum prices rose after last week's sharp drop as
investors awaited the outcome of wage talks to end a strike in
South African mines.
Gold was hit by technical selling after it failed to rise
above its 50-day average near $1,285 an ounce.
Bullion initially rallied after the United States said it
could launch air strikes to support the Iraqi government after a
rampage by Sunni Islamist insurgents.
The yellow metal had gained nearly 4 percent in the past
seven sessions on the rising violence in Iraq and lingering
tensions over Ukraine.
"Gold is taking a breather after a very big move," said
Anthem Blanchard, CEO of Anthem Vault, a precious metals dealer
which also provides storage services. "Any significant moves
like this in gold tells me that financial markets are scared."
Spot gold eased 0.3 percent to $1,272.41 an ounce by
3:22 p.m. EDT (1922 GMT), having hit its highest since May 27 at
$1,284.85 earlier in the session.
U.S. COMEX gold futures for August delivery settled
up $1.20 at $1,275.30 an ounce, outperforming spot prices.
Trading volume was about 40 percent below its 30-day average,
preliminary Reuters data shows.
Investors often turn to gold or other precious metals as a
safe haven in times of political or financial uncertainty. So
far this year, gold has failed to maintain gains despite
heightened geopolitical tensions, however.
Gold's initial gains were also boosted by developments in
Ukraine, where pro-Russian separatists shot down a Ukrainian
army transport plane.
Traders also warned this Wednesday's Federal Reserve policy
meeting could bring caution to any rally in gold as markets
watch for any signals on when the U.S. central bank might begin
raising interest rates.
Silver edged down 0.3 percent to $19.61 an ounce.
Among other precious metals, platinum rose after falling
sharply last week on expectations that the strike in South
Africa might be close to a settlement. The leader of South
Africa's AMCU union said on Friday a wage deal with the top
three platinum producers was imminent.
Platinum was up 0.6 percent to $1,432.30 an ounce,
while palladium slipped 0.3 percent to $806.97 an ounce.
3:22 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold AUG 1275.30 1.20 0.1 1271.80 1285.10 91,742
US Silver SEP 19.759 0.060 0.3 19.630 19.915 11,524
US Plat JUL 1439.10 4.10 0.3 1435.50 1445.60 9,856
US Pall SEP 809.35 -3.25 -0.4 808.30 823.50 3,729
Gold 1272.41 -4.09 -0.3 1272.38 1284.85
Silver 19.610 -0.050 -0.3 19.630 19.880
Platinum 1432.30 8.00 0.6 1433.50 1442.50
Palladium 806.97 -2.03 -0.3 810.20 822.00
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 94,312 156,578 165,321 13.18 0.32
US Silver 59,874 46,102 55,278 16.76 0.04
US Platinum 13,439 14,198 12,385 17.69 -0.71
US Palladium 3,830 9,257 5,884 23.01 3.60
(Additional reporting by Lewa Pardomuan in Singapore and Susan
Thomas in London; Editing by Jane Merriman, Mark Potter, Sofina
Mirza-Reid and Diane Craft)