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TOKYO, June 14 (Reuters) Gold was on the defensive on Wednesday following a sell-off in precious and base metals the previous day, with sentiment dampened by a strong dollar, weak oil prices and concerns over interest rate hikes.

Spot gold briefly fell as far as around $543 an ounce -- the lowest since March 14 -- after speculative sales triggered stop-loss sell orders around $550.

At 0516 GMT, spot gold was at $551.00/552.00, down about two percent from $562.00/562.70 in late New York on Tuesday.

Despite the recovery from lows, gold and other precious metals were vulnerable to further liquidation from investors such as short-term and index-based funds, who are trying to shift out of commodities following a recent sell-off.

''It's too early to say whether we would see more falls, but the dip below $550 seems to be a bit overdone. The fall was exaggerated by market thinness,'' said a senior trader at a Japanese trading house said.

''Nikkei, Australian and Asian stock prices are recovering. We need to see first whether stocks will also recover after Asian trade in America and Europe before making further decisions about precious metals.'' Gold briefly dropped below the key technical support of $546, which is the 200-day moving average, but a quick recovery could mean that the market was a bit cautious about selling too heavily from current levels, traders said.

Investment funds and investors shifted out from risky assets to park their funds in bonds and bank deposits as falling share prices and uncertainty over U.S. monetary policy led to a broad sell-off in commodities, including gold.

''We've seen a very big downward correction yesterday. We may see more falls but it won't be as big as what we've seen this week,'' said Shuji Sugata, assistant manager at Mitsubishi Corporation Futures and Securities Ltd.

''Previously when we saw a major correction, gold always came back strongly, but investors will be more careful this time about taking positions in gold again. It may take a while before the market can fully regain confidence,'' Sugata said.

The key Tokyo Commodity Exchange gold futures contract currently April 2007, was trading down by its daily 60-yen limit, or 2.7 percent, at 2,142 yen ($18.59) per gram. It was pegged at that level since the opening at 0000 GMT.

On Tuesday, gold futures in New York plummeted 7.3 percent, the biggest fall in more than 15 years.

Gold came under pressure as the dollar hit new one-month highs against the euro and yen on Tuesday. Gold has a tight inverse relationship with the U.S. currency as investors often use the metal as a dollar alternative.

Oil fell sharply, echoing similar moves across commodities and stocks. The fact that Tropical Storm Alberto, the first in the U.S.

hurricane season, was forecast to miss key U.S. oil and gas infrastructure also hit prices.

Relentless liquidation in base metals prices also helped undermine sentiment for precious metals.

Copper prices fell for a fifth straight session on Wednesday as investors continued to pull money out of metals on concerns about a slowing global economy and tightening liquidity.

London Metal Exchange copper for delivery in three months was at $6,420/$6,450 a tonne, down $150, or 2.3 percent, from Tuesday's London close.

Other precious metals fell from late New York levels, tracking the fall in gold.

Silver edged down to $9.47/9.53 an ounce from $9.56/9.66 late in New York.

Platinum was at $1,095/1,105 ounce, down from $1,116/1,120 in New York.

Palladium fell to $264/274 an ounce from $272/277 in late New York.

($1=115.21 yen) REUTERS DK BST1154