* Dollar index hit seven-week low in prior session
* Volume, demand on Shanghai Gold Exchange seen drying up
(Updates prices, adds comment)
By Zandi Shabalala
LONDON, Jan 24 (Reuters) - Gold slipped from a two-month
peak on Tuesday as investors took stock of U.S. President Donald
Trump's first policy moves and the dollar stabilised after
plumbing seven-week lows this week.
Trump formally withdrew from the Trans-Pacific Partnership
trade deal on Monday and told U.S. manufacturing executives he
would impose a hefty border tax on firms that import products
after moving American factories overseas.
"It's all been flagged and it's all playing out according to
the well-rehearsed script of Trump and his advisers," Robin
Bhar, Societe Generale's head of metals research, said.
"The high in gold is an opportunity to take a bit of
profit," Bhar said, adding that the price was stuck in a
$1,120-$1,220 range.
Trump's protectionist statements and a lack of detail on
policy have led some investors to opt for gold, which is often
seen as an alternative investment in times of geopolitical and
financial turmoil. It rose to its highest level since Nov. 22
during Tuesday's session before giving back gains.
Spot gold was down 0.3 percent at $1,214.53 an ounce
after peaking at $1,219.59. U.S. gold futures slipped
0.2 percent to $1,213.
The dollar index, which measures the greenback
against a basket of currencies, hovered near 100.070 after
falling to a seven-week low of 99.899 in the previous session.
Analysts said the gold market was seeking clarity from
Trump's administration on tax and spending policies that could
impact growth and provide clues on the direction of U.S.
interest rates.
"The focus is going to be about what Trump and his team are
going to do in terms of cutting corporation tax and
incentivizing U.S. companies to bring back profits held
overseas," ICBC Standard Bank analyst Tom Kendall said.
"It's those kinds of fiscal policies that will be important
for gold."
Volumes and buying demand on the Shanghai Gold Exchange are
expected to start drying up between now and the week-long Lunar
New Year break, MKS PAMP Group trader Alex Thorndike said.
Silver lost 0.3 percent to $17.13 per ounce, while
platinum gained 0.6 percent to $982.7.
Palladium was up 0.4 percent at $781 an ounce after
hitting $795.60, its highest since May 2015, in the previous
session.
(Additional reporting Arpan Varghese and Nallur Sethuraman in
Bengaluru; Editing by Alexander Smith and Dale Hudson)