(Corrects 5th paragraph to say policymakers were not set on
more cuts)
* SPDR Gold holdings jumped 0.8% on Wednesday
* Spot gold may rise to $1,524 per ounce -technicals
* In near term, expect palladium to climb to $1,530/oz - UBS
By Brijesh Patel
Aug 22 (Reuters) - Gold prices dipped on Thursday as
investors locked in profits, with the focus shifting to Friday's
speech by U.S. Federal Reserve Chairman Jerome Powell at the
Jackson Hole meeting for clarity on the direction of monetary
policy.
Spot gold XAU= was down 0.5% at $1,494.09 an ounce by 1212
GMT, while U.S. gold futures GCcv1 slipped 0.8% to $1,503 an
ounce.
"The markets are waiting for Jackson Hole. After prices
failed to stay above the important $1,500 mark, it's not
surprising that investors are taking the chips off the table,"
Commerzbank analyst Eugen Weinberg said, adding that demand for
the metal would remain strong overall.
"Geopolitical tensions, trade uncertainties and above all,
developments in financial markets ... will support gold.
Interest rates worldwide keep falling and in this environment,
gold emerges as a solid investment," Weinberg added.
Minutes of the Fed's July meeting showed policymakers were
divided over whether to cut interest rates but united in wanting
to signal they were not set on more cuts. The immediate focus shifts to Powell's speech for further
clues on interest rate cuts, especially after an inversion in
the Treasury yield curve highlighted the risk that the U.S.
economy may fall into recession. US/
Fed funds futures 0#FF: are fully pricing a quarter-point
cut in rates next month and more than 100 basis points of easing
by the end of next year. FEDWATCH
Lower U.S. interest rates put pressure on the dollar and
bond yields, increasing the appeal of non-yielding bullion.
FISCAL STIMULUS
Traders are also looking to the Group of Seven summit this
weekend for clues on what additional steps policymakers may take
to boost economic growth.
Meanwhile, hopes for further U.S. fiscal stimulus took a
knock when President Donald Trump reversed course and said he
was not looking at cutting payroll taxes. Holdings of SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, rose 0.8% to 851.91 tonnes on
Wednesday. GOL/ETF
Palladium XPD= eased 0.2% to $1,468.21 an ounce after
nearing $1,500 mark in the previous session.
"We expect palladium to climb to $1,530 in the near term.
Although slower global growth and risk aversion act as
headwinds, palladium remains supported by fundamentals," UBS
analysts said in a note.
"Rising palladium loadings as emissions regulations tighten
offset weakness in global car sales, suggesting continued growth
in demand. Given constrained supplies, this implies that market
deficits are likely to persist."
Palladium outshone gold for the first time in 16 years
towards the end of 2018, but gold regained its edge over the
autocatalyst metal on Aug. 1, driven by an escalation in the
trade war and heightened fears over a global downturn.
Silver XAG= fell 0.5% to $17.03 per ounce, while platinum
XPT= edged 0.2% higher to $854.54.