PRECIOUS-Gold retreats as upbeat U.S. data lifts dollar

* Dollar hits 11-month highs against euro, currency basket * Buying still weak in number one consumer China * Coming up: Minutes of Fed's July meeting at 1800 GMT (Updates prices) By Jan Harvey LONDON, Aug 20 (Reuters) - Gold prices extended a three-day losing streak on Wednesday, as demand stagnated and the dollar hit its highest in nearly a year against a currency basket on growing optimism over the U.S. economy. Buying in China, the world's number one gold consumer, remains weak, dealers said, though concern over violence in Ukraine and the Middle East has fuelled some interest in the metal as a store of value. Spot gold was down 0.1 percent at $1,294.35 an ounce at 1149 GMT, while U.S. gold futures for December delivery were down 40 cents an ounce to $1,296.30. The metal has traded within a range of just over $42 so far in August, its narrowest monthly range in five years. "(Gold is under pressure from) a combination of the stronger dollar, together with ongoing weak demand," Heraeus trader Alexander Zumpfe said. "It's a bit frustrating from a trading perspective - it's not only range trading, this range is also very tight." The dollar reached an 11-month peak against the euro and a basket of major currencies on Wednesday, buoyed by optimism over the health of the U.S. economy. Strong U.S. housing data lifted Wall Street shares on Tuesday, nudging Treasury yields higher and helping the dollar extend gains against the euro and yen. Gold tends to suffer from strength in the dollar, in which it is priced. World equities mostly halted their recent rally on Wednesday ahead of the release of minutes of the Federal Reserve's July meeting at 1800 GMT, while UK stocks and bonds fell after Bank of England minutes showed two rate-setters voted earlier this month to raise interest rates. FED AHEAD Gold is highly sensitive to the outlook for U.S. economic policy, after benefiting strongly from ultra-loose monetary conditions in the wake of the financial crisis. Any sign that the Fed is reining in that policy more quickly than expected could hurt prices. "A clearer and stronger policy message from the Fed is needed to shift gold price expectations materially from here," UBS said in a note on Wednesday. "Given the general trend in macroeconomic data and the seeming complacency of market participants right now, the greater risk is for a hawkish surprise." Fed Chair Janet Yellen will address an annual gathering of policymakers in Jackson Hole, Wyoming, on Friday. Silver was up 0.3 percent at $19.48 an ounce, while spot platinum was down 0.2 percent at $1,428.75 an ounce and spot palladium fell 1.2 percent to $868.50 an ounce. Impala Platinum's Zimbabwe unit Zimplats has ceased operations at its Bimha mine following an underground collapse in July, the company said on Wednesday, adding that the stoppage could cost it 70,000 ounces in 2015. (Additional reporting by A. Ananthalakshmi; editing by Michael Urquhart and Keiron Henderson)