*

Gold marked worst day in over 1 year in previous session

*

Silver down 1%

*

PCE inflation data due on Friday

(Recasts, adds analyst comment and updates prices, as of 0336

GMT)

By Sherin Elizabeth Varghese

April 23 (Reuters) - Gold prices fell on Tuesday to

their lowest levels in more than two weeks on easing concerns of

an escalation in the Middle East crisis, and as investors booked

profits while awaiting key U.S. data for fresh clues on the

Federal Reserve's rate trajectory.

Spot gold was down nearly 1% at $2,304.99 per ounce,

as of 0336 GMT. U.S. gold futures fell 1.2% to

$2,318.80.

"Gold has been the recipient of different types of buying

flows in recent months, and now one of those flows has slightly

dried up with safe-haven demand receding," said Tim Waterer,

chief market analyst, KCM Trade.

Gold dipped more than 2% in the previous session, marking

its biggest intraday fall in more than a year, as fears of a

wider regional conflict eased after Iran said it had no plan to

retaliate following an apparent Israeli drone attack.

"Investors are seeing this as an opportunity to lock in some

profits after gold's recent run of good form," Waterer said.

Gold hit a record high of $2,431.29 on April 12.

This week's main economic focus will be on gross domestic

product (GDP) data on Thursday and Personal Consumption

Expenditures (PCE) print on Friday.

"If these happen to produce a beat to the upside we could

see a further extension of the wait for interest rate relief.

Such a scenario could cause the gold price to take a larger step

back ... in the short term from an opportunity cost

perspective," Waterer said.

Markets forecast for a 0.3% increase in the headline PCE

number in March, unchanged from the previous month, and a

year-on-year gain of 2.6%, compared with a 2.5% increase in

February, according to a Reuters poll.

Among other precious metals, spot silver fell about

1% to $26.92 per ounce, spot platinum dropped 0.7% to

$911.10, and palladium slumped 1.1% to $997.75.