PRECIOUS-Gold eases as placid Fed supports dollar

* Powell: early to judge trade, tariff impact on monetary
policy
* Markets await Fed minutes due on Wednesday

(Updates prices)
By Arijit Bose
May 21 (Reuters) - Gold eased on Tuesday after touching a
more than two-week low in the previous session, as increasing
bets that the U.S. Federal Reserve will not cut interest rates
this year boosted the dollar which usurped bullion's safe-haven
appeal.
Spot gold XAU= edged 0.1% lower to $1,275.81 per ounce at
0734 GMT. Last session, gold dipped to a more than two-week
trough of $1,273.22.
U.S. gold futures GCv1 also eased 0.1% to $1,275.40 an
ounce.
The dollar held near a 2-1/2-week high on Tuesday, supported
by higher U.S.-yields and as intensifying trade frictions
between the United States and China boosted appetite for the
safe-haven greenback. USD/
"The dollar strength is starting to re-emerge because the
Fed really hasn't been as dovish as market participants are
looking for," said David Song, an analyst at DailyFX.
"As long as the data continues to come broadly in line with
what the Fed is looking for, we are watching a theme right now
where the Fed is really reluctant to conclude their hiking
cycle."
Fed Chair Jerome Powell said on Monday it was "premature" to
ascertain the impacts of trade and tariff on the trajectory of
monetary policy instead enunciating that recent economic data
pointed towards a healthy supply side. Elsewhere, Asian shares wobbled near four-month lows on
mounting worries that White House's black-listing of Chinese
telecom giant Huawei could further inflame already tense
relations between the United States and China. MKTS/GLOB
Gold, which is generally considered a safe-haven asset, has
shrugged most news of escalating tensions, much to the bulls'
dismay, analysts said.
Analysts believe the dollar has started to mimic its
characteristics from last year when it was preferred over gold
by investors looking to hedge against a simmering trade war.
Beijing on Monday accused Washington of harbouring
"extravagant expectations" for a deal to end their stretched
trade dispute, sparking worries that the two countries were
digging for a longer, costlier trade war. "Gold's lack of momentum despite an escalating trade war,
raised concerns about stability in the Middle East, recent stock
market gyrations and bond yields near an 18-month low have left
potential investors frustrated and sidelined," Saxo Bank
commodity strategist Ole Hansen said in a note on Monday.
"The currency market is potentially posing the biggest
short-term challenge with the dollar increasingly behaving as
the only safe haven at this stage."
Markets now await the Fed minutes due on Wednesday, which
will provide insights into the May 1 meeting by the central
bank.
Among other precious metals, silver XAG= fell 0.3% to
$14.43 an ounce, closing in on a more than five-month low of
$14.33 touched in the previous session.
Platinum XPT= rose 0.2% to $813.36, after hitting a
two-month low of $805.50 last session, while palladium XPD=
rose 0.5% to $1,335.15.