PRECIOUS-Gold hits 2-week low as dollar eclipses metal's safe-haven appeal

* SPDR Gold holdings rose 0.4% on Friday
* Speculators raise COMEX gold longs in week to May 14
* $1,265 critical level for gold - analyst
* Silver falls to over 5-month low

(Updates prices)
By Arijit Bose
May 20 (Reuters) - Gold prices fell to a more than two-week
trough on Monday as strong U.S. economic data underpinned the
dollar, boosting its safe-haven status over gold amid political
and trade tensions.
Spot gold XAU= was broadly unchanged at $1,276.83 per
ounce as of 0731 GMT, having fallen to $1,274.39, its lowest
since May 3 earlier, in the session.
U.S. gold futures GCcv1 edged 0.1% higher at $1,276.50 an
ounce.
U.S. consumer sentiment jumped to a 15-year high in early
May amid growing confidence over the economy's outlook, data
showed on Friday. The dollar index was slightly higher, having booked its
biggest weekly rise since early March last week supported by
concerns about European parliamentary elections. USD/
Rekindled Sino-U.S. trade tensions have also seen the dollar
.DXY mimicking its characteristics from last year when it was
preferred over gold as a safe-haven hedge.
"The safe-haven demand of the U.S. dollar is taking some of
the gloss off gold's safety," said Michael McCarthy, chief
market strategist, CMC Markets.
"It is a tough time all around for gold with the break below
$1,290 also pressuring it. In the absence of safe-haven demand I
would expect to see ongoing modest pressure on gold prices."
Market participants were left concerned after Google
confirmed a Reuters report stating that it suspended some
business with Chinese tech giant Huawei, which has been a
sticking point in the trade relations between the United States
and China. In the Middle East, Iran was served a new warning by U.S.
President Donald Trump who tweeted that if the country wanted to
fight, that would be its "official end". The heightened rhetoric follows last week's attacks on Saudi
oil assets and the firing of a rocket on Sunday into Baghdad's
heavily fortified "Green Zone" that exploded near the U.S.
embassy. "For gold, $1,265 is now a critical support that must hold.
A daily close below that region implies a much deeper correction
could be imminent," OANDA analyst Jeffrey Halley said in a note.
Meanwhile, holdings of SPDR Gold Trust GLD , the world's
largest gold-backed exchange-traded fund, rose 0.4% to 736.17
tonnes on Friday. GOL/ETF
Hedge funds and money managers also raised their net long
positions in COMEX gold in the week to May 14, the U.S.
Commodity Futures Trading Commission (CFTC) said on Friday.
CFTC/
"We suspect some of the these new longs must have gotten
shredded over the past two sessions," INTL FCStone analyst
Edward Meir said in a note.
Among other precious metals, silver XAG= was steady at
$14.42 an ounce, having earlier matched a more than five-month
low from the previous session at $14.35.
Platinum XPT= gained nearly 1% to $821.45, having fallen
to $812.50, its lowest since March 11, in the previous session.
Palladium XPD= rose 0.4% to $1,315.05. The metal used in
catalytic converters in car exhaust systems has shed nearly 19%
of its value since scaling a record peak of $1,620.53 in March.