PRECIOUS-Gold dips on strong dollar and optimism over trade deal

* Silver hits lowest since Aug. 20 at $16.85
* SPDR Gold holdings fell 0.2% on Monday
* Palladium slips after breaching $1,700

(Updates prices)
By Brijesh Patel
Oct 1 (Reuters) - Gold slid to its lowest in nearly two
months as the dollar climbed to a multi-year peak on signs of
strength in the U.S. economy while hopes of a breakthrough in
the U.S.-China trade dispute dampened interest in the metal as a
haven from risk.
Spot gold XAU= was down 0.6% at $1,462.99 per ounce, as of
1252 GMT, after touching its lowest since Aug. 6 at $1,458.50
earlier in the session.
U.S. gold futures GCcv1 were down 0.2% at $1,469.30.
"There seem to be some headlines people are reading
positively on the trade front, which is also supporting the
dollar, so that's naturally weighing on the gold market," said
OANDA senior market analyst Craig Erlam.
"Price action seen over the past week made the $1,480
support level very vulnerable. Gold broke that level yesterday
and it's capitalising on those moves to push further down. There
is room for plenty more declines over the next few weeks."
The dollar held firm on Tuesday after posting its biggest
quarterly gain in more than a year, with encouraging U.S.
economic data leading markets to scale back expectations that
the U.S. Federal Reserve will cut interest rates in the coming
months. FRX/
That has weighed on gold because lower interest rates cut
the opportunity cost of holding non-yielding bullion.
"(A) less accommodative Fed implies a stronger U.S. dollar
and higher U.S. yields, which are the absolute worst bedfellows
for gold markets," AxiTrader market strategist Stephen Innes
said in a note.
Bullion has lost nearly $100 since scaling a peak of $1,557
early September, largely owing to an uptick in the dollar.
It is still up 14% this year, with earlier gains driven by
an escalation in the U.S.-China trade conflict, concerns over
global economic growth and the prospects for monetary easing by
central banks.
More positive signs on trade have weighed on the metal of
late. The White House dismissed reports that the Trump
administration was considering delisting Chinese companies from
U.S. stock exchanges as "fake news", bolstering risk sentiment.
MKTS/GLOB
China and the United States are due to resume high-level
trade talks in Washington next week.
Indicative of investor sentiment, holdings at SPDR Gold
Trust GLD , the world's largest gold-backed exchange-traded
fund, fell 0.2% to 920.83 tonnes on Monday. Elsewhere, palladium XPD= fell 0.8% to $1,660.50 an ounce,
having hit a record high of $1,700.71 on Monday on a sustained
supply deficit of the autocatalyst metal.
Platinum XPT= eased 0.2% to $880.60. Silver XAG= gained
0.4% to $17.06 after touching its lowest since Aug. 20 at
$16.85.