* Asian shares scale two-year highs after Fed minutes
* Fed says prudent to confirm recent slowdown transitory
* Spot gold seen retesting resistance at $1,264 per ounce- technicals
(Updates prices) May 25 (Reuters) - Gold held steady on Thursday to keep most of its gains from the previous session, with the dollar slipping after minutes of the U.S. Federal Reserve's last policy meeting downplayed the chance of more aggressive interest rate hikes. The minutes showed policymakers agreed they should hold off on raising interest rates until it was clear a recent U.S. economic slowdown was temporary, although most said a hike was coming soon. Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.
Spot gold was nearly flat at $1,257.90 per ounce by
0728 GMT. It rose about 0.6 percent on Wednesday.
U.S. gold futures were up 0.4 percent at $1,258 an
ounce. "I do not think the market's view for two more rate hikes has changed following the release of the Fed meeting minutes," said Argonaut Securities analyst Helen Lau. "It was not a very strong view from the Federal Open Market Committee and hence gold hasn't reacted," she added. Federal funds futures implied traders stuck with an 83 percent chance the Fed would raise rates by a quarter point at its June 13-14 meeting, according to CME Group's FedWatch program. "We think that the precious metal has weathered the prospect of a Fed increase rather well," said INTL FCStone analyst Edward Meir. "We do see further strengthening ahead in light of what we think will be continued dollar weakness emanating from more Trump-related headaches emanating from Washington." Spot gold is expected to retest a resistance at $1,264 per ounce, a break below which could lead to a gain to the next resistance at $1,276, according to Reuters technical analyst Wang Tao. Gold prices were kept under check on Thursday as investors shrugged off risk aversion and opted for equities, said Richard Xu, a fund manager at China's biggest gold exchange-traded fund, HuaAn Gold. Asian shares scaled two-year highs with MSCI's broadest index of Asia-Pacific shares outside Japan advancing 0.9 percent, hitting its highest level since June 2015.
Meanwhile, the dollar index that measures the
greenback against a basket of major currencies was down 0.3 percent.
Among other precious metals, silver was up 0.1 percent at $17.21 an ounce, while platinum gained 0.4
percent to $948.10 an ounce.
Palladium rose 0.8 percent to $769.18 an ounce.
On Wednesday, silver gained nearly 1 percent, while palladium fell by as much.
(Reporting by Vijaykumar Vedala in Bengaluru; Editing by Richard Pullin and Subhranshu Sahu)