* Dollar rises 0.3 percent, European shares climb * India hikes gold import duty for 3rd time in 2013 * Coming up: U.S. retail sales for July at 1230 GMT (Updates prices) By Clara Denina LONDON, Aug 13 (Reuters) - Gold fell on Tuesday, retreating from a three-week high hit the previous session, as the dollar rose and investors awaited U.S. retail sales data, while a new hike in Indian import tax undermined sentiment. Traders also reported that volumes remained muted during the summer holiday period. Spot gold extended initial declines, falling 0.6 percent to $1,327.41 an ounce by 1141 GMT. U.S. gold futures for December dropped $7.30 to $1,326.80 an ounce. The metal rose nearly 2 percent in the previous session, hitting a three-week high of $1,343.06 on signs of solid Chinese consumption and as the world's largest exchange-traded fund (ETF) SPDR Gold Trust posted its first inflow in two months on Friday. The fund's holdings were unchanged on Monday. The top eight gold ETFs tracked by Reuters have recorded outflows of about $26 billion so far this year, hurting gold prices. A reversal in the trend would aid a price recovery. "We should be trading between $1,300 and $1,350 until September when we have more people around and more macro economic events," MKS SA head of trading Afshin Nabavi said. "There is however a chance we can see some upside simply because the numbers out of the States have started to look a little bit shakier lately ... any disappointing number today could weigh the dollar down and lift gold." The dollar was up 0.3 percent, extending gains into a third day in anticipation that U.S. data will point to the Fed rolling back its $85 billion of monthly bond purchases sooner rather than later. The next test of this view will be the retail sales report at 1230 GMT, which most expect to be strong. European shares also rose after German analyst and investor sentiment climbed more than expected in August. Gold has fallen about 20 percent this year on expectations the U.S. Federal Reserve will start to scale back its economic stimulus programme. INDIA RAISES IMPORT TAX Gold prices were also hit by news that the Indian federal government hiked import duty on refined gold bars for a third time in eight months to 10 percent from 8 percent and on silver to 10 percent from 6 percent. "Import curbs and import tax hikes by authorities are concerning," VTB Capital said in a note. "We are yet to see how large seasonal buyers react to the government's persistent drive at discouraging gold buying, with New Delhi desperately seeking to reduce the country's trade deficit." Silver rose to a near two-month high of $21.69 an ounce earlier in the session and was later trading up 0.2 percent to $21.39, still on track for its fifth straight session of gains for the first time since January. The gold/silver ratio stood at its lowest since late May at around 61.50, down sharply from a three-year high of 67 at the end of July. Platinum edged up 0.2 percent to $1,495.24 an ounce, having reached a two-month peak of $1,507.50 in the previous session. Palladium fell 0.3 percent to $733.47 an ounce. (Additional reporting by A. Ananthalakshmi in Singapore; editing by Keiron Henderson)

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