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PRECIOUS-Gold dips on stronger dollar, Fed meet in focus

July 30 (Reuters) - Gold prices eased on Tuesday as the dollar held near multi-month highs, while investors awaited outcome of a two-day U.S. Federal Reserve policy meeting, where the central bank is widely expected to reduce interest rates.

FUNDAMENTALS

* Spot gold fell 0.3% to $1,422.81 per ounce at 0128 GMT.

* U.S. gold futures gained 0.2% to $1,422.50 an ounce.

* The dollar was up 0.1%, hovering near a two-month high hit in the previous session, making gold expensive for holder of other currencies.

* The U.S. Fed begins a two-day policy meeting later on Tuesday, at which it is widely expected to lower interest rates by 25 basis points. If implemented, it would be the central bank's first rate cut in a decade.

* Japan's central bank is expected to keep monetary policy on hold at a meeting ending later on Tuesday, but some investors say there is a chance Japan's central bank could change its forward guidance to reassure traders that rates will remain low.

* The U.S.-China trade negotiations are due to begin in Shanghai on Tuesday, although expectations for progress during the two-day meeting are low.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.83% to 824.89 tonnes on Monday from 818.14 tonnes on Friday.

* Asian stocks edged up on Tuesday as equity investors prepared for an expected U.S. interest rate cut this week.

* There is a growing risk of a no-deal Brexit where Britain exits the European Union without a trade deal in place. There is also a chance that new Prime Minister Johnson will call an early election.

DATA AHEAD(GMT)

* 1230 US Consumption, adjusted June

1400 US Consumer Confidence July

* -- Japan JP BOJ Rate Decision

* -- US U.S. Federal Reserve's Federal Open Market

Committee starts its two-day meeting on

interest rates (to July 31) (Reporting by Harshith Aranya in Bengaluru; Editing by Rashmi Aich)