* Palladium slides to seven-week low
* Dollar rises to over 2-year high
* Investors await U.S. non-farm payrolls report on Friday (New throughout, updates prices, market activity and comments)
By K. Sathya Narayanan
Aug 1 (Reuters) - Gold prices fell to their lowest in two weeks on Thursday as the dollar surged the day after the U.S. Federal Reserve doused expectations of further monetary policy easing, while palladium slumped more than 5%.
Spot gold was steady at $1,414.17 per ounce as of 10:59 a.m. EDT (1459 GMT), after falling to its lowest since July 17 at $1,400.31. U.S. gold futures slid 1% to $1,414.30 an ounce.
"Some people positioned for a more robust expression of dovishness from Fed and they didn't get it. Less expectations of robust monetary policy easing and certainly a stronger dollar are the key issues here," said Bart Melek, head of commodity strategies at TD Securities in Toronto.
The U.S. dollar rose to its highest against other major currencies since May 2017, making the non-yielding bullion expensive for holders of other currencies.
In line with market expectations, the U.S. central bank slashed its benchmark interest rate on Wednesday for the first time in a decade. However, gold prices fell as much as 1.2% on Wednesday after Fed Chair Jerome Powell signalled further sharp cuts were not imminent.
"Gold responded to the fact that there is a lot of ambiguity now on how the Fed will tackle the monetary policy going forward," Melek added.
However, lower interest rates and resurgent investor and central bank buying are expected to help gold prices cement recent gains and hold above $1,400 an ounce next year, a Reuters poll showed on Thursday.
Market participants are now awaiting the release of U.S. non-farm payrolls data on Friday.
On the trade front, U.S. and Chinese negotiators ended a brief round of trade talks with little sign of progress and agreed to meet again in September, prolonging an uneasy truce in a year-long trade war between the world's two largest economies.
In other precious metals, spot palladium fell to its seven-week low of $1,429 per ounce earlier this session. The metal was last down 5.7% at $1,429.92.
Palladium collapsed. An analyst in New York cited investors liquidating positions in the metal after prices breached a key technical level of $1,490, a New York based analyst said adding, weaker auto sales in China further pressured the market.
Platinum was down 1.4% at $847.53 an ounce, after falling to its lowest since July 17 at $838.
Silver was down 1% at $16.09 per ounce, after touching a two-week low of $15.88 earlier in the session. (Reporting by K. Sathya Narayanan in Bengaluru; Editing by David Gregorio)