PRECIOUS-Gold dips as dollar firms, Trump's Powell remarks ease market jitters

July 17 (Reuters) - Gold prices dipped in early Asian trade on Thursday, pressured by a firmer dollar and easing market tensions after U.S. President Donald Trump said it was "highly unlikely" he would dismiss Federal Reserve Chair Jerome Powell.

FUNDAMENTALS

Spot gold XAU= was down 0.2% at $3,340.16 per ounce, as of 0120 GMT. U.S. gold futures GCcv1 fell 0.4% to $3,346.50.

The dollar index .DXY edged 0.1% higher against its rivals, making greenback-priced bullion more expensive for other currency holders. USD/

Trump is open to the idea of firing Federal Reserve Chair Jerome Powell, a source told Reuters on Wednesday.

However, Trump said on Wednesday that he is not planning to fire Powell, but kept the door open to the possibility and renewed his criticism of the central bank chief for not lowering interest rates.

Investors worry that removing Powell before his term ends in May 2026 would undermine credibility in the U.S. financial system and the dollar as a safe-haven currency.

Gold is often used as a safe store of value during times of political and financial uncertainty.

Data showed that U.S. producer prices were unexpectedly unchanged in June as an increase in the cost of goods because of tariffs on imports was offset by weakness in services.

On the trade front, EU trade chief Maros Sefcovic headed to Washington on Wednesday for tariff talks, an EU spokesperson told Reuters, adding that he will meet U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer.

SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.33% to 950.79 tons on Wednesday from 947.64 tons in the prior session. GOL/ETF

Spot silver XAG= eased 0.1% to $37.86 per ounce. Platinum XPT= rose 0.2% to $1,419.95 and palladium XPD= gained 0.2% to $1,233.09.