July 29, 2019 / 5:39 AM / a month ago

PRECIOUS-Gold steady as markets eye Fed meet, U.S.-China trade talks in focus

* SPDR Gold holdings dipped 0.14% on Friday

* Gold looks neutral in a range of $1,412-$1,427/oz - technicals

* U.S. Fed to review monetary policy at meet on July 30-31 (Updates prices)

By Harshith Aranya

July 29 (Reuters) - Gold prices were stable on Monday, ahead of a U.S. Federal Reserve meeting later in the week where markets will watch for indications of monetary easing in the world’s largest economy.

Spot gold were little changed at $1,418.90 per ounce, as of 0745 GMT. Prices had dropped about half a percent in the previous week, pressured by dollar strength and robust U.S. economic data.

U.S. gold futures were flat at $1,418.60 an ounce.

“This week we have the FOMC (Federal Open Market Committee) meeting, where we are likely to see a dovish outlook- this will lead to weakness in the dollar and will eventually trigger some upside in gold prices,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.

The Fed is expected to trim the key interest rate by at least 25 basis points (bps) at its July 30-31 meeting. Investors will also look for signals of likely additional cuts in the pipeline.

Interest rate futures are fully priced for a quarter-point rate cut from the Fed on Wednesday, with only a small chance of a half-point move.

Meanwhile, U.S. and Chinese trade talks are shifting to Shanghai this week, as negotiators from both countries meet for their first in-person talks since a truce at G20 last month. Expectations are low for a breakthrough.

“If talks continue to drag on, it will have a negative impact on the global economy. You should expect to see some more easing by central banks around the world, not only by the United States,” said Helen Lau, analyst, Argonaut Securities, adding that this could provide support to gold.

On the technical front, gold looks neutral in a range of $1,412-$1,427 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.14% to 818.14 tonnes on Friday.

Hedge funds and money managers reduced their bullish stance in COMEX gold in the week to July 23, the U.S. Commodity Futures Trading Commission (CFTC) said in a report on Friday.

Among other precious metals, silver and palladium inched 0.1% higher to $16.41 per ounce and $1,536.39 per ounce, respectively. Platinum was up 0.9% at $868.11 per ounce. (Reporting by Harshith Aranya and Karthika Suresh Namboothiri in Bengaluru; editing by Richard Pullin & Uttaresh.V)

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