* Minutes of U.S. Fed meeting due at 1800 GMT
* SPDR Gold holdings rise 0.4% on Tuesday
(Updates prices)
By Arijit Bose
May 22 (Reuters) - Gold edged lower on Wednesday to hover
near a two-week low, as a stronger dollar and signs of easing
Sino-U.S. friction dented demand for bullion ahead of the
minutes from U.S. Federal Reserve's latest meeting.
Spot gold XAU= edged down 0.1% to $1,273.47 per ounce at
0704 GMT. In the previous session, the metal fell to $1,268.97,
its lowest since May 3.
U.S. gold futures GCcv1 were unchanged at $1,273.20 an
ounce.
The dollar .DXY hovered near a 3-1/2-week high supported
by higher U.S. yields, which rose overnight after the United
States eased trade restrictions on Chinese telecommunications
equipment maker Huawei Technologies Co Ltd HWT.UL . USD/
US/
"A stronger dollar and Washington's extension to Huawei for
3 months has put the knife into gold," OANDA analyst Jeffrey
Halley said.
On Monday, the U.S. Department of Commerce granted Huawei a
license to buy U.S. goods until Aug. 19, a move intended to give
telecom operators that rely on Huawei enough time to make
alternative arrangements. "The market has been tipping it as an easing of trade
friction, so we have seen a rotation out of safe harbour trade,
albeit temporarily," Halley added.
Chinese Ambassador to the United States Cui Tiankai on
Tuesday said Beijing was ready to resume talks with Washington,
but blamed the latter for frequently "changing its mind" on
tentative deals. Gold is now more than 5% below its late-February 2019 peak
of $1,346.73 per ounce.
Meanwhile, investors await the release of U.S. Federal
Reserve's minutes at 1800 GMT, which is expected to provide
insights into the May 1 meeting by the central bank, when
policymakers kept interest rates steady and signalled little
appetite to adjust them any time soon.
On Monday, Fed Chair Jerome Powell reiterated his unmoved
demeanour stating it was premature to ascertain the impact of
trade and tariffs on monetary policy. "Despite the volatile environment, investors perhaps still
believe that the equity market provides better capital gains due
to the Fed's actions, and are playing down the need for a
hedge," Howie Lee, an economist at OCBC Bank, said.
Meanwhile, holdings of SPDR Gold Trust GLD , the world's
largest gold-backed exchange-traded fund, rose 0.4% to 739.69
tonnes on Tuesday. GOL/ETF
However, holdings have fallen nearly 7% so far this year,
indicating a subdued investor interest in bullion.
Spot gold XAU= may now test a support at $1,264 per ounce,
a break below that could open the way towards $1,244, according
to Reuters technical analyst Wang Tao. L4N22Y0WQ
Among other precious metals, silver XAG= fell 0.2% to
$14.41 per ounce.
Platinum XPT= shed 0.4% to $809.92 an ounce, while
palladium XPD= was down 0.3% to $1,315 per ounce.
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