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PRECIOUS-Gold prices dented by stronger dollar ahead of Fed minutes

       * May FOMC policy meeting minutes due at 1800 GMT
    * Gold prices set to snap five-session winning run

 (Updates prices)
    By Bharat Gautam
    May 25 (Reuters) - Gold prices fell on Wednesday as the
dollar firmed in the run-up to minutes from the U.S. Federal
Reserve's May policy meeting, which could provide cues on its
policy tightening path.
    Spot gold        was down 0.4% at $1,859.39 per ounce by
0820 GMT, after rising to a two-week high of $1,869.49 on
Tuesday. U.S. gold futures        dropped 0.4% to $1,857.80.
    The dollar        advanced after hitting its lowest level in
a month in the previous session, making greenback-priced bullion
more expensive for buyers holding other currencies.
    "Traders will be looking to the FOMC (Federal Open Market
Committee) minutes for policy hints beyond June and July, as
September rate hike expectations could be hugely pivotal for
gold prices," said Stephen Innes, managing partner at SPI Asset
    The FOMC is expected to release the minutes from its May 3-4
policy meeting at 1800 GMT.
   However, "investors are struggling with how to assess the
landing path of inflation now that peak inflation is behind us.
The question for the market is how long it will take to
normalize, and that uncertainly is helping gold," Innes said.
    While gold is seen as an inflation hedge, higher short-term
U.S. interest rates raise the opportunity cost of holding
non-yielding bullion.
    As the Federal Reserve amps up its fight against
40-year-high inflation with what is expected to be a string of
big interest-rate increases, a U.S. central banker injected a
note of caution, warning headlong rate hikes could create
"significant economic dislocation."
    Spot gold may stabilise around a support at $1,856 per ounce
and retest a resistance at $1,867, according to Reuters'
technical analyst Wang Tao.
    Spot silver        fell 0.7% to $21.93 per ounce, platinum
       eased 1.2% to $943.32, and palladium        dropped 0.5%
to $1,997.41.

 (Reporting by Bharat Govind Gautam in Bengaluru; Editing by
Sherry Jacob-Phillips and Rashmi Aich)

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