* Gold climbs to $1,365.23/oz, highest since Jan. 25
* Palladium extends this week's 6 pct rally
* Markets await Fed minutes later in the day
* GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl
(Updates prices, headline; adds comment after Fed meeting
minutes released)
By Renita D. Young and Jan Harvey
NEW YORK/LONDON, April 11 (Reuters) - Gold prices retreated
from session highs on Wednesday but remained positive after the
U.S. Federal Reserve confirmed policymakers' sentiment of a
stronger U.S. economy, denting safe haven appeal.
All Fed policymakers felt the U.S. economy would firm
further and inflation would rise in coming months, minutes of
the central bank's last policy meeting on March 20-21 released
Wednesday showed.
Spot gold gained 0.8 percent at $1,349.91 per ounce
by 2:38 p.m. EDT (1838 GMT), while June U.S. gold futures
settled up $14.10, 1.1 percent, at $1,360.
"The Fed continues to maintain their hawkish tilt and they
are of the views, right now, that the steel and aluminum tariffs
don't really have a big effect on the outlook," said Shree
Kargutkar, portfolio manager at Sprott Asset Management.
Since the March meeting, Fed officials have largely adopted
a wait-and-see attitude to trade policy, noting it is not yet
clear if the tariffs will go into effect and their eventual size
if implemented.
The Fed is expected to keep rates unchanged at its next
policy meeting on May 1-2, but investors overwhelmingly see
another rate increase at the following one in mid-June.
Gold is highly sensitive to rising U.S. interest rates
because the metal does not pay interest and rising rates make
interest-bearing investments more attractive.
Gold earlier rose close to 2 percent to $1,365.23 per ounce,
its highest since Jan. 25, as escalating tensions in Syria, U.S.
sanctions on Russia and the U.S.-China trade stand-off weighed
on stock markets and the dollar index.
"The safe haven bid, recently with Syria tensions along with
the weaker dollar, continues to support gold today," said David
Meger of High Ridge Futures.
Safe haven bids have sparked good demand for gold through
products such as bullion-backed exchange-traded funds, said
Capital Economics analyst Simona Gambarini. "Gold is benefiting
from the risk-off sentiment and because people are trying to
hedge against worst-case scenarios."
The greenback, in which gold is priced, languished near a
two-week low against a basket of currencies.
Gold is often perceived as a safe store of value during
times of political and financial uncertainty.
Meanwhile, silver increased 0.55 percent to $16.64 an
ounce, earlier reaching $16.87, a near two-month high.
Platinum rose 0.7 percent to $930.70 per ounce, off a
$941.60, a two-week high.
Palladium increased 1 percent at $961.50 per ounce,
earlier reaching $971.30, a two-week high. The autocatalyst
metal, of more than 40 percent is produced in Russia, bounced
strongly as sanctions against Moscow fed into a
technically-driven rally.
(Reporting by Renita D. Young in New York and Jan Harvey in
London; Additional reporting by Swati Verma in Bengaluru;
Editing by Chizu Nomiyama and Cynthia Osterman)