PRECIOUS-Gold dips as trade optimism, dovish ECB lift equities; focus on Fed

* Fed scheduled to release statement at 1800 GMT
* Trump says to meet Xi at G20, trade talks to resume
* Dollar holds near two-week high
* Palladium scales fresh 12-week high

(Updates prices)
By Harshith Aranya
June 19 (Reuters) - Gold prices slipped on Wednesday as
hopes of a resolution to the Sino-U.S. trade spat and a dovish
European Central Bank lifted riskier assets, while investors
awaited the U.S. Federal Reserve's monetary policy decision
later in the day.
Spot gold XAU= was down 0.3% at $1,342.60 per ounce as of
0744 GMT. U.S. gold futures GCv1 also declined 0.3%, to
$1,346.60 an ounce.
"We have equity markets surging because of (U.S. President
Donald) Trump tweet last night, which has taken a lot of the
scepticism out of the market," said Stephen Innes, managing
partner at SPI Asset Management.
Equity markets jumped after Washington said it would resume
trade talks with Beijing and as investors dared to hope the U.S.
Federal Reserve would follow the lead of the ECB and open the
door to future rate cuts at its policy meeting. MKTS/GLOB
Trump said on Tuesday he had spoken to Chinese President Xi
Jinping and that the two leaders' teams would restart trade
talks after a long lull in order to prepare for a meeting at the
G20 summit later this month. There are a lot of uncertainties in the market, including
tensions in the Middle East and a dovish Fed narrative, which
should give support to gold, Innes said.
All eyes are now on the Fed which is scheduled to release a
statement at 1800 GMT, followed by a press conference by
Chairman Jerome Powell. The Fed is widely expected to stand pat on monetary policy
this time but open the door for an interest rate cut at its next
meeting in July.
"We urge investors to temper bullish expectations on gold as
an improvement in risk appetite from dovish monetary policy will
cap gains for the non-interest bearing asset," Phillip Futures
said in a note.
Denting the metal's appeal, the dollar index .DXY held
near a more than two-week high, supported by a dovish ECB and
bearish eurozone economic data. USD/
"If the Fed comes out dovish or more dovish or as dovish as
markets are pricing, it will weaken the U.S. dollar, which will
add to gold's allure," Innes from SPI Asset Management said.
Among other precious metals, silver XAG= dipped 0.5% to
$14.93 per ounce, while platinum XPT= rose 0.2% to $800.71.
Palladium XPD= gained 0.8% at $1,491.80 per ounce, after
hitting its highest since March 27 at $1,496.50 earlier in the
session.