PRECIOUS-Gold steadies as investors await cues on future Fed rate cuts

* SPDR Gold holdings rose 0.8% on Monday
* Investors keep an eye on U.S.-China trade talks
* FOMC policy decision at 1800 GMT on Wednesday

(Updates prices)
By K. Sathya Narayanan and Diptendu Lahiri
July 30 (Reuters) - Gold prices steadied on Tuesday, a day
before the conclusion of the Federal Reserve's two-day policy
meeting, as investors awaited more information on the outlook
for interest rate cuts by the U.S. central bank.
Spot gold XAU= was up 0.2% at $1,429.38 per ounce as of
1:45 p.m. EDT (1745 GMT).
U.S. gold futures GCv1 settled 0.7% up at $1,429.70
"The market is anticipating a cut at the Federal Open Market
Committee (FOMC) meeting tomorrow, but what is up in the air is
the extent of the dovish or hawkish comments," said Daniel
Ghali, commodity strategist at TD Securities.
"If Fed Chair Jerome Powell comes out with a more
dovish-than-expected statement, gold might hit a multiyear
high."
Market participants expect the U.S. central bank to cut its
benchmark interest rate for the first time since the financial
crisis more than a decade ago. Federal funds futures FEDWATCH
implied traders saw an 81% chance of a 25 basis-point rate cut.
The Federal Reserve is scheduled to announce its monetary
policy decision at 2 p.m. EDT on Wednesday as well as issue a
statement.
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion and weigh on the dollar.
"Liquidity is still thin as traders seem to be holding back
before the Fed gives its views on monetary policy," said
Benjamin Lu, an analyst at Phillip Futures, adding that a firm
dollar was putting pressure on gold prices.
The dollar .DXY held close to a two-month peak against key
rivals, making greenback-denominated assets such as gold
costlier for investors holding other currencies. USD/
On the technical front, "Gold is holding a narrow range
ahead of the FOMC meeting results with support standing at just
below $1,420 per ounce and more importantly at $1,410," INTL
FCStone analyst Rhona O'Connell said in a note.
Meanwhile, investors will also keep a close eye on
U.S.-China trade talks in Shanghai this week.
Officials from both the countries restarted negotiations,
after talks stalled in May, in a bid to end a year-long
tit-for-tat tariffs war. Expectations of a breakthrough are low.
Reflecting investors' appetite for bullion, holdings in the
world's largest gold-backed exchange-traded fund, SPDR Gold
Trust GLD , rose 0.8% to 824.89 tonnes on Monday. GOL/ETF
Holdings HLDSPDRGT=XAU have risen for the second straight
month, gaining nearly 4% so far in July.
Among other precious metals, silver XAG= rose 0.5% to
$16.53 per ounce, while platinum XPT= fell 1.2% to $868.17 per
ounce.
Palladium XPD= dropped 2.7% to $1,510.98 per ounce.