PRECIOUS-Gold dips as dollar holds firm ahead of U.S. Fed meet

    * Investors cautious ahead of Tue-Wed FOMC meeting -analysts
    * U.S. extends tariff exemption by 1 month for major allies

 (Adds quotes, details, updates prices)
    By Eileen Soreng
    BENGALURU, May 1 (Reuters) - Gold prices fell for a second
straight session on Tuesday as the dollar firmed near
3-1/2-month highs, with investors awaiting direction on U.S.
monetary policy from the U.S. Federal Reserve.
    Spot gold        fell 0.2 percent to $1,312.11 per ounce at
0356 GMT. Prices hit $1,310.11 on Monday, their lowest since
March 21. 
    U.S. gold futures         for June delivery eased 0.5
percent to $1,313.10 per ounce. 
    "The recent U.S. dollar revival has negatively impact gold
as the intensity of the USD correction has caught most traders
by surprise," said Stephen Innes, APAC trading head at OANDA.
    The dollar index        was steady at 91.848 as investors
awaited the Fed's policy decision and key employment data due
this week for fresh clues on the strength of the U.S. economy. 
    While the U.S. central bank is widely expected to stand pat
on policy, market participants will be closely watching the
two-day meet concluding on Wednesday for hints of an interest
rate hike in June.        
    The greenback touched its highest since Jan. 11 at 91.986 on
Friday. It climbed 2 percent in April, recording its biggest
monthly gain since November 2016. 
    "Investor are also remaining cautious ahead of this week's
two day FOMC meeting," said analysts at ANZ in a note. 
    Higher interest rates tend to boost the U.S. dollar and push
bond yields up, pressuring gold prices by increasing the
opportunity cost of holding non-yielding bullion. 
    Meanwhile, U.S. stock futures pared small losses, while
Asian shares were little changed on Tuesday after the U.S.
extended the deadline for imposing steel and aluminium tariffs
on imports from major allies.                         
    Most markets in Asia are closed for a Labour Day holiday.
    Among other precious metals spot silver        fell 0.1
percent to $16.29 per ounce. Prices touched their lowest in
about a month, at $16.18, in the previous session.
    Platinum        was down 0.2 percent at $901.00 per ounce.
Prices hit $898.10 on Monday, its lowest since Dec. 18, 2017.
    Palladium        fell 0.3 percent to $962.20 per ounce.  
    

 (Reporting by Eileen Soreng in Bengaluru; Editing by Richard
Pullin and Tom Hogue)
  



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