* Fed seen raising rates, 2018 rate hike projections infocus

* 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 XAU= was 0.4 percent higher at $1,315.84 perounce at 0746 GMT. Prices fell to a nearly three-week low of$1,306.91 in the previous session.

U.S. gold futures GCcv1 for April delivery rose 0.27percent to $1,315.40 per ounce.

The dollar index .DXY , which measures the greenbackagainst a basket of six major currencies, slipped 0.2 percent to90.195 after climbing to 90.445 on Tuesday, its highest sinceMarch 1. USD/

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 GLD , the world's largestgold-backed exchange-traded fund, holdings rose 1.26 percent,their best one-day percentage rise since Jan. 18, to 850.84tonnes on Monday.

SPDR holdings, however, fell 0.04 percent on Tuesday. GOL/ETF

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. urn:newsml:reuters.com:*:nL1N1R122D

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 XAG= andplatinum XPT= were up 0.5 percent, at $16.27 per ounce and$944.90 per ounce, respectively.

Palladium XPD= rose 0.2 percent at $980.50 per ounce.

(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))