PRECIOUS-Gold slides to two-week low as Fed dashes hopes of more rate cuts

* SPDR Gold holdings slipped 0.2% on Wednesday
* Silver dips to 2-wk low; platinum hits 1-wk low
* U.S.-China trade talks end with no signs of progress

(Updates prices)
By Brijesh Patel
Aug 1 (Reuters) - Gold prices dropped to two-week lows on
Thursday after the U.S. Federal Reserve cut rates by 25 basis
points as expected but tampered market expectations of a lengthy
easing cycle, lifting the dollar to a two-year high.
Spot gold XAU= was down 0.4% at $1,407.40 per ounce as of
0735 GMT, after falling to its lowest since July 17 at
$1,404.71.
U.S. gold futures GCv1 slipped 1.4% to $1,418.10 an ounce.
"Adopting the rate cuts the way they (Fed) primed is more
like an insurance policy rather than a commencement of series of
rate cuts, that created a bit of uncertainty," said John Sharma,
an economist with National Australia Bank.
As expected by markets, policymakers moved the U.S. central
bank's benchmark overnight lending rate to a target range of
2.00% to 2.25%, citing concerns about the global economy and
muted U.S. inflation.
However, Fed Chair Jerome Powell, speaking in a news
conference after the release of the central bank's statement,
characterised Wednesday's rate cut as "a mid-cycle adjustment to
policy", a sign to markets that further sharp cuts were not
imminent. "The Fed was non-committal for the need for further rate
cuts as such gold was sold off," said Heng Koon How, head of
markets strategy at Singapore's United Overseas Bank.
"Our longer-term gold view remains positive. Over the
near-term, we can expect gold to trade within the $1,400 to
$1,450 range."
In the wake of Powell's comments, the dollar .DXY rose
0.3% to a two-year high on Thursday, making gold more expensive
for holders of other currencies. USD/
"The dollar has broken out on the charts and looks like it
is going to push higher still, yet another reason to pursue
caution when it comes to the long side in the precious group,"
INTL FCStone analyst Edward Meir said in a note.
On the trade front, U.S. and Chinese negotiators ended a
brief round of trade talks with little sign of progress and
agreed to meet again in September, prolonging an uneasy truce in
a year-long trade war between the world's two largest economies.
Meanwhile, holdings of SPDR Gold Trust GLD , the world's
largest gold-backed exchange-traded fund, fell 0.18% to 823.42
tonnes on Wednesday from Tuesday. GOL/ETF
A bullish target at $1,452 per ounce has been aborted for
spot gold, following its fall on Wednesday, said Reuters
technical analyst Wang Tao. Elsewhere, silver XAG= was down 1.3% at $16.04 per ounce,
after touching a two-week low of $15.97 earlier in the session.
Platinum XPT= was 0.8% lower at $853.06 an ounce, after
falling to its lowest since July 23 at $846.50, while palladium
XPD= eased 0.4% to $1,510.36.

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