PRECIOUS-Gold slips from two-month peak as dollar regains footing

    * U.S. manufacturing activity grew at a slower pace in April
    * Silver eases off two-month high
    * Fed's Powell says U.S. economy is "not out of the woods

 (Adds comments, updates prices)
    By Shreyansi Singh
    May 4 (Reuters) - Gold prices retreated from a more than
two-month high on Tuesday due to an uptick in the dollar,
although weaker-than-expected U.S. economic data stoked concerns
over recovery and limited losses for the safe-haven metal.
    Spot gold        was down 0.2% at $1,788.89 per ounce by
0404 GMT, after hitting its highest since Feb. 25 at $1,797.75
on Monday.
    U.S. gold futures        fell 0.1% to $1,789.40 per ounce.
    "The reversal in the dollar is weighing on gold a bit, we've
seen the dollar strengthen despite the Feds near-term dovish
rhetoric," said DailyFX currency strategist Ilya Spivak.
    "On the top side, immediate resistance for gold lies at
$1,800 per ounce. If we can break that, we open the door for
$1,850 or $1,875 as a follow on levels in the immediate."
    The dollar index        rose 0.2% against its rivals, making
gold less attractive for other currency holders.       
    The U.S. economy is doing better, but is "not out of the
woods yet," Federal Reserve Chairman Jerome Powell said on
Monday in remarks that flagged an upcoming central bank study.
    Data on Monday showed U.S. manufacturing activity grew at a
slower pace in April. Investors now await April payrolls data
due later this week.             
    "Slower expansion in U.S. manufacturing reinforces
expectations that central banks, including the Federal Reserve,
will keep interest rates near zero," Avtar Sandu, senior
commodities manager at Phillip Futures, said in a note.
    Lower interest rates decrease the opportunity cost of
holding non-yielding bullion.
    Palladium        rose 0.2% to $2,977.63 per ounce, after
scaling an all-time high of $3,007.73 per ounce on Friday.
    Silver        was down 0.5% at $26.74 per ounce, after
hitting its highest since March 1 on Monday, while platinum
       rose 0.1% to $1,231.46.

 (Reporting by Shreyansi Singh in Bengaluru; Editing by Sherry
Jacob-Phillips and Rashmi Aich)