PRECIOUS-Gold drops to more than two-week low as dollar, equities gain


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    * Dip below $1,266 could trigger further gold decline
    * Fed minutes due on Wednesday
    * Dollar index near one-month high

 (Updates prices)
    By Brijesh Patel
    May 21 (Reuters) - Gold prices slipped to a more than
two-week low on Tuesday, as the dollar strengthened and improved
risk appetite took the sheen off bullion ahead of the release of
minutes from the U.S. Federal Reserve's latest policy meeting.
    Spot gold  XAU=  was down 0.4% at $1,272.42 per ounce as of
1315 GMT, having touched its lowest since May 3 at $1,270.09.
    U.S. gold futures  GCv1  also fell 0.4%, to $1,272.00 an
    "Right now the only safe haven out there seems to be the
dollar, which has been moving higher against most currencies,"
said Saxo Bank commodity strategist Ole Hansen.
    "Also, there has been a slight improvement in the outlook
for the stock markets after the U.S. decided to provide Huawei
with a 90-day reprieve."
    Both factors were weighing on gold, he added.
    The dollar index  .DXY  rose to its strongest in nearly a
month, boosted by higher U.S. yields and as fears of the
economic fallout from the U.S-China trade row prompted investors
to choose the safety of the U.S. currency over bullion.  USD/ 
    This pointed to a repeat of a similar trend last year when
the dollar emerged as the go-to hedge against the simmering
trade war, stemming flows into gold.
    Stocks markets, meanwhile, gained after Washington
temporarily eased trade restrictions imposed on Chinese telecom
equipment maker Huawei Technologies  HWT.UL .  MKTS/GLOB  
    On Monday the U.S. Commerce Department granted Huawei a
licence to buy U.S. goods until Aug. 19 to maintain existing
telecoms networks and provide software updates to Huawei
    Markets now await Wednesday's release of minutes from the
U.S. central bank's May 1 meeting, looking for insights on
future interest rates.
    Fed Chair Jerome Powell said on Monday that it was premature
to ascertain the impact of trade and tariffs on the trajectory
of monetary policy, instead pointing to recent healthy economic
    "From a technical point of view, a first positive signal
(for gold) would be a recovery to $1,290, while a fall below the
recent low of $1,266 could open space for a further decline," 
said ActivTrades analyst Carlo Alberto De Casa.
    Among other precious metals, silver  XAG=  was down 0.2% at
$14.44 an ounce, closing in on the more than five-month low of
$14.33 touched in the previous session.
    Platinum  XPT=  fell 0.9% to $804.60 and palladium  XPD= 
eased by 0.1% to $1,327.65.

 (Reporting by Brijesh Patel in Bengaluru
Editing by David Goodman and Susan Fenton)
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