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ECB rate decision due later in the day

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Risk sentiment lifted by progress on trade

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Dollar at more than two-week low

(Adds comments and updates for Asia morning session)

By Brijesh Patel

July 24 (Reuters) - Gold prices held steady on Thursday

after a sharp drop in the previous session, as easing trade

tensions dented demand for safe-haven assets, overshadowing

support from a weaker dollar.

Spot gold was flat at $3,387.15 per ounce, as of 0138

GMT, after dropping 1.3% in the previous session. U.S. gold

futures eased 0.1% to $3,492.50.

"Yesterday, we saw gold prices seems like well might be

building up for the next bullish run until the news came out on

trade front, triggering some profit-taking," said Brian Lan,

managing director at GoldSilver Central, Singapore.

"We've seen the dollar has also weakened quite a bit, and of

course, this also supports gold. So, I think this is a small

retracement at this moment. We are, in fact, still quite bullish

on gold."

Signalling progress on tariffs, U.S. President Donald Trump

struck a trade deal with Japan that lowers tariffs on auto

imports.

The European Union and the United States are nearing an

agreement on a similar trade deal that would impose 15% tariffs

on European imports, while waiving duties on some items,

according to officials from the European Commission.

Risk sentiment in the wider financial markets rose on the

back of progress in trade talks and hopes that more deals could

be in the offering.

Offering support to gold, the U.S. dollar index fell

to a more than two-week low, making greenback-priced bullion

less expensive for other currency holders.

Investors also look forward to a rate decision from the

European Central Bank due later in the day.

Also on the radar, the U.S. weekly jobless claims numbers on

Thursday and S&P Global's flash PMI data will be eyed to gauge

economic health ahead of the Federal Reserve's monetary policy

decision next week.

Spot silver slipped 0.3% to $39.16 per ounce,

platinum was steady at $1,411.53 and palladium

dipped 1% to $1,265.50.