PRECIOUS-Gold steadies as dollar slips, investors await US data

By Brijesh Patel and Ishaan Arora

May 15 (Reuters) - Gold prices erased early losses to steady on Thursday, helped by a weaker dollar and technical buying as investors await key U.S. economic data later in the day for further clarity on future interest rates.

Spot gold XAU= was little changed at $3,179.07 an ounce as of 1102 GMT, after hitting its lowest since April 10 earlier in the session. U.S. gold futures GCcv1 fell 0.3% to $3,179.20.

"We're seeing it's more of a short-covering bounce for gold," said Fawad Razaqzada, market analyst at City Index and FOREX.com. "With the dollar weakening, it possibly has contributed to the demand."

He said technical factors were also at play, with gold coming off key trendline support "that has been in place since the start of this year". "That level comes in at... (around) $3,130," Razaqzada said.

The dollar index .DXY slipped 0.3%, making gold cheaper for other currency holders. USD/

The U.S. and China this week agreed to temporarily slash harsh reciprocal tariffs, de-escalating a trade war and denting demand for gold as a safe haven.

On Thursday, focus will turn to U.S. producer price index data due at 1230 GMT after softer-than-expected consumer data earlier this week.

Federal Reserve Chair Jerome Powell's speech later in the day will be watched for clues on the Fed's rate path.

Markets are expecting 50 basis points of rate cuts this year, with the reductions expected to start from October. USDIRPR

Non-yielding gold tends to thrive in a low-rate environment.

Elsewhere, spot silver XAG= dipped 0.4% to $32.09 an ounce and palladium XPD= rose 0.6% to $956.58. Platinum XPT= was up 0.7% at $982.53.

The palladium market, which was in deficit in 2012-2024, will move into balance this year, with demand falling by 6% as a result of lower production of gasoline vehicles, a major industrial use of the metal, and increased recycling in China, Johnson Matthey said in a report.