*

Analyst says gold to drift back to $2,355 if dollar keeps

upward

momentum

*

Fed minutes reflected discussion of possible further hikes

*

Price rise likely to temper discretionary gold buying -

ANZ

(Adds comment in paragraph 11 and updates prices)

By Sherin Elizabeth Varghese

May 23 (Reuters) - Gold prices fell for a third straight

session on Thursday after minutes from the most recent Federal

Reserve meeting indicated that some officials were inclined to

raise interest rates.

Spot gold fell 0.6% at $2,365.49 per ounce, as of

0638 GMT. Bullion hit a record high of $2,449.89 on Monday.

U.S. gold futures were down 1.1% at $2,367.60.

While the policy response for now would "involve

maintaining" the U.S. central bank's benchmark policy rate at

its current level, the minutes released on Wednesday also

reflected discussions of possible further hikes.

"Gold did take a bruising after the Fed minutes reminded

investors that interest rate cuts are far from imminent," said

Tim Waterer, chief market analyst at KCM Trade.

Bullion is known as an inflation hedge, but higher rates

increase the opportunity cost of holding non-yielding gold.

"There is a chance gold could drift back to support levels

around the $2,355 region if the dollar keeps the upward momentum

going," Waterer said, adding that the medium to longer-term

outlook still looks constructive for gold, but that is very much

predicated on the next rate move being lower and not higher from

the Fed.

Traders' bets signalled growing doubts that the Fed will cut

rates more than once in 2024, currently pricing in a 72% chance

of a rate cut by November.

India's gold imports in 2024 could fall by nearly a fifth

from the previous year as record high prices spur retail

consumers to exchange old jewellery for new items, the head of

an industry body told Reuters.

"While physical gold demand has been holding up well since

2021, a sharp price rise is likely to temper discretionary

buying in 2024. For jewellery demand, fewer days deemed in

Indian and China to be auspicious for weddings could be a

headwind," ANZ said in a note.

Spot silver fell 0.9% to $30.48, platinum

lost 0.6% to $1,028.55 and palladium dropped 1.1% to

$988.62.