PRECIOUS-Gold remains at its lowest level in nearly four months, as Fed position strengthens dollar

* Or, about 1.1% less this week

* SPDR Gold's holdings reached their lowest level in almost 7 months

* US Treasury yields at a high of one week (Add details, comments and updates prices)

By Arijit Bose

May 3 (Reuters) – Gold prices came close Friday on a four-month low in the previous trading session, after the US Federal Reserve dampened expectations of a near-term rate cut. propelling the dollar upward and steering the dollar drop weekly rate.

A stronger dollar makes gold more expensive for holders of other currencies.

The spot gold price was little changed at $ 1,271.25 an ounce at 3:14 GMT. In the previous session, the yellow metal had dropped to $ 1,265.85, its lowest level since the end of December.

The bullion has lost about 1.1% so far this week.

US gold futures remained stable at $ 1,272.20 per ounce.

On Wednesday, Fed Chairman Jerome Powell said that the inflation risks highlighted in the release of US GDP data were solely based on transitory factors, and that it was not likely to be the case. There was no obligation to readjust the interest rates in the near future.

"The removal of an overly optimistic positioning for a dovish Fed has put a hammer on gold," said Jeffrey Halley, Senior Market Analyst at OANDA.

The Fed's decision pushed the US Treasury yields to a high of one week, as the dollar ended on a firmer note as markets reduced their bets on a reduction in the US rate.

The greenback has risen slightly since Powell downplayed the recent slowdown in inflation and saw no reason to lower interest rates.

"The dollar will continue to strengthen and Treasury yields (at 10 years) will always oscillate around the highest levels. US data does not suggest a slowdown, so gold will be under pressure in the near term, "said Halley.

However, while major hubs – China and Japan remain closed during the holidays, Asian equities as a whole have been under control, dampening a further decline in the gold market, badysts said.

"From a technical point of view, there is a first level of support (for gold) at $ 1,266, while the previous support levels of $ 1,280 and $ 1,288 now represent an area of resistance for prices, "said in a note the chief badyst of ActiveTrades, Carlo Alberto De Casa on Thursday.

Reflecting the sentiment of gold investors, the holdings of SPDR Gold Trust, the largest gold-backed exchange-traded fund in the world, fell 0.16% to 745.52 tonnes on Thursday, their lowest level since October 12th.

Silver plunged 0.1% to 14.61 dollars an ounce, or nearly 14.52 dollars, a low for more than four months, touched in the previous session.

Platinum fell 0.1% to $ 847.20 an ounce, after hitting a one-month low of $ 839 earlier in the session, while palladium fell 0.2 $ 1,351.70 per ounce. (Report by Arijit Bose in Bengaluru, edited by Sherry Jacob-Phillips)