PRECIOUS-Gold falls from 2-mth high as dollar strength dents safe-haven appeal

* Silver eases off two-month high
* Fed's Powell says U.S. economy is "not out of the woods
yet"
* Spot gold may test resistance at $1,802/oz - technicals

(Recasts, adds comments, chart, updates prices)
By Shreyansi Singh
May 4 (Reuters) - Gold prices fell from a more than
two-month high on Tuesday, as a rebound in the dollar dented the
metal's safe-haven appeal, while investors speculated that a
swifter than expected U.S. economic recovery might prompt an
interest rate hike.
Spot gold XAU= was down 0.4% at $1,786.10 per ounce by
0702 GMT, after hitting its highest since Feb. 25 at $1,797.75
on Monday.
U.S. gold futures GCv1 fell 0.4% to $1,785.50.
"A strong dollar is the primary reason for the slight
correction," said Hareesh V., head of commodity research at
Geojit Financial Services, adding that sustained strength in the
greenback is likely to weigh on bullion.
The dollar index .DXY rose 0.3%, making gold less
attractive for other currency holders. USD/
Federal Reserve Chairman Jerome Powell said on Monday the
U.S. economy is doing better, but it is "not out of the woods
yet". "At this stage, it doesn't really seem particularly market
moving for the Fed to repeat the status quo... the market is now
starting to consider when the time for an alternative is going
to come," DailyFX currency strategist Ilya Spivak said.
The U.S. central bank wants to keep monetary policy loose
for the foreseeable future, but the economic recovery gaining
pace has fanned speculations of a pull back in support sooner
than expected.
Higher interest rates increase the opportunity cost of
holding non-yielding bullion.
Investors now await April payrolls data due later this week
for further cues on the U.S. economy's health. Spot gold may test a resistance at $1,802 per ounce, and a
break could lead to a gain to $1,816, according to Reuters
technical analyst Wang Tao. TECH/C
Elsewhere, palladium XPD= rose 0.1% to $2,973.29 per
ounce, after scaling an all-time high of $3,007.73 on Friday.
Silver XAG= was down 0.3% at $26.79, after hitting its
highest since March 1 on Monday, while platinum XPT= was
steady at $1,230.49.

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