* Gold down 4 pct from over 1-1/2-year high touched in Jan
* Analysts see global political tensions supporting gold
(Updates prices)
By Eileen Soreng
March 21 (Reuters) - Gold prices rose on Wednesday as thedollar fell as investors await the outcome of the U.S. FederalReserve's meeting this week for signs of the pace of monetarytightening, which could limit the demand for bullion goingforward.
Spot gold
U.S. gold futures
The dollar index
With a 25 basis point interest rate hike seen as a donedeal, investors will be on the lookout for whether the Fedforecasts four rate increases in 2018, instead of the median ofthree hikes in December's quarterly forecast.
"Dealers will be looking at forward guidance to determinethe dollar's prospects, and therefore that of gold," saidAlasdair Macleod, head of research with Toronto-based GoldmoneyInc.
The Fed will make an announcement on interest rates at 1800GMT on Wednesday and new Fed Chairman Jerome Powell will holdhis first news conference at 1830 GMT.
The expectations for a faster pace of U.S. rate hikes havecaused gold to fall 4 percent from a 1-1/2-year high reached inJanuary.
Higher U.S. interest rates reduces demand for gold fornon-interest-bearing bullion.
Heightened geo-political tensions, inflation concerns, tradewars and runaway U.S. budget deficit spending should serve tocounteract the well-expected Fed rate hike and keep the floor ongold prices intact, Stephen Innes, APAC trading head at OANDAsaid.
Holdings in the SPDR Gold Trust
SPDR holdings, however, fell 0.04 percent on Tuesday.
U.S. President Donald Trump is expected to unveil up to $60billion in import duties on Chinese goods by Friday. The movecomes after Trump imposed tariffs on imported steel andaluminium earlier this month.
Investors are worried Trump's actions could escalate into atrade war if China and other countries retaliate with similar orharsher measures, threatening global growth.
Among other precious metals, both spot silver
Palladium
(Reporting by Eileen Soreng and Nallur Sethuraman in Bengaluru,Editing by Christian Schmollinger and Subhranshu Sahu) ((eileen.soreng@thomsonreuters.com; Within U.S. +1 651 8485832, Outside U.S. +91 80 6749 6131; Reuters Messaging:eileen.soreng.thomsonreuters.com@reuters.net))