PRECIOUS-Gold steadies after 2% slide but firmer dollar limits upside

* Spot gold may fall to $1,488/oz - technicals
* SPDR Gold Trust holdings rose 1.8% on Wednesday
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

(Adds comments, details, updates prices)
By Eileen Soreng
Sept 26 (Reuters) - Gold steadied on Thursday after the
previous session's near 2% slide, with lower prices tempting
some buyers back to the market as uncertainty over the
U.S.-China trade war persisted, but a firmer dollar capping
gains.
The U.S. currency rose across the board on Wednesday after
Democrats in the House of Representatives launched an
impeachment inquiry against U.S. President Donald Trump,
prompting investors to seek refuge in the dollar. That sparked a 1.8% slide in gold prices, their biggest
one-day percentage drop in three weeks.
Spot gold XAU= showed signs of recovery on Thursday,
rising 0.3% at $1,507.86 per ounce by 0806 GMT. U.S. gold
futures GCcv1 were up 0.2% at $1,514.80 per ounce.
"Yesterday's 2% fall is a very good opportunity to buy
gold," said Vandana Bharti, assistant vice-president of
commodity research at SMC Comtrade.
"Given the uncertainties surrounding geopolitical headlines
such as the U.S.-China trade spat and Trump's impeachment
inquiry, the market is not leaving any opportunity to buy gold
if they see any correction."
The dollar index .DXY held steady near multi-week highs on
Thursday as investors struggled to make sense of President
Trump's mixed signals on a trade deal with China. FRX/
Trump said on Wednesday a deal to end the trade war could
happen sooner than people think. However that followed sharp
criticism of China earlier in the week, when in a speech to the
United Nations he said he would not accept a "bad deal".
Asian stocks pared gains on Thursday as optimism faded for a
quick resolution to the trade spat, which some analysts say
could have global repercussions. USD/ MKTS/GLOB
IG Markets analyst Kyle Rodda said evidence that the global
economy is slowing and policymakers will potentially partake in
new quantitative easing programmes suggested rates and yields
were likely to fall, potentially benefitting non-yielding gold.
"Gold's price from a fundamental perspective is still
supported," he said.
Indicative of investor sentiment, holdings of the world's
largest gold-backed exchange-traded fund, the SPDR Gold Trust
GLD , rose 1.8% to 924.94 tonnes on Wednesday, their highest
since November 2016. Spot gold is likely to fall to $1,488 per ounce, as it has
broken support at $1,514, according to Reuters technical analyst
Wang Tao. Among other precious metals, spot silver XAG= rose 0.2% to
$17.94 per ounce. Palladium XPD= and platinum XPT= were up
0.5% at $1,650.51 and $929.75 per ounce respectively.

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