(Updates prices)
    * FOMC two-day meeting to begin on Tuesday
    * Ukraine-Russia peace talks resume
    * Palladium ekes out gains after dropping about 17% on
Monday
    * Platinum slips to 1-1/2 month low

    By Brijesh Patel
    March 15 (Reuters) - Gold fell nearly 2% on Tuesday to a
two-week trough, as hopes of progress in peace talks between
Russia and Ukraine coupled with the likelihood of a U.S.
interest rake hike dented demand for the safe-haven asset.
    Spot gold        fell 1.3% to $1,926.11 per ounce by 1:43
p.m. ET (1743 GMT), after earlier touching its lowest since
March 1 at $1,913.10.
    U.S. gold futures        settled down 1.6% at $1,929.70. 
    "There's a lesser need for safe havens at the moment given
peace talks in Ukraine, the upcoming Federal Reserve rate hike
and some pullback in commodity prices across the board," said
David Meger, director of metals trading at High Ridge Futures. 
    Talks between Russia and Ukraine, discussing a ceasefire and
a withdrawal of Russian troops from Ukraine are ongoing, one of
Ukraine's negotiators said.             
    The Fed is expected to raise interest rate by 25 basis
points on Wednesday to fight soaring inflation.             
    The prospect of the first U.S. rate hike in three years
lifted U.S. 10-year treasury yields to multi-month highs. Higher
interest rates increase the opportunity cost of holding
non-yielding bullion.      
    "The first rate hike move from the U.S. quite often signals
a low point in gold, so we'll see what kind of signal they send
tomorrow, and how hawkish their statement is, which will
probably determine the short-term outlook from here," said Saxo
Bank analyst Ole Hansen.          
    Spot palladium        was up 1.7% at $2,427.36 per ounce,
after its weakest session in two years on Monday, as supply
fears receded.                         
    The rising COVID-19 cases in China could also lower demand
for the autocatalyst metal amid fresh lockdowns, said Bart
Melek, head of commodity strategies at TD Securities. 
    "It's a two-prong impact here - on the supply side, there's
less risk, while on the demand side, potentially less demand."
                        
    Silver        fell 0.1% to $24.98, while platinum       
slipped 3.4% to $995.52.

 (Reporting by Brijesh Patel and Seher Dareen in Bengaluru;
Editing by Amy Caren Daniel and Shailesh Kuber)