PRECIOUS-Gold prices hold steady ahead of Fed verdict

* Stock markets slip on fresh trade concerns
* Fed expected to cut rates by 25 basis points
* Dollar firm near two-month peak
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

(Updates prices)
By Brijesh Patel
July 31 (Reuters) - Gold prices held steady on Wednesday as
investors waited on the outcome of the Federal Reserve's meeting
later in the day when policymakers are expected to cut interest
rates for the first time since the financial crisis.
Spot gold XAU= was flat at $1,430.69 per ounce as of 0723
GMT.
U.S. gold futures GCv1 edged 0.1% higher to $1,443.60 an
ounce.
"Most of the people are staying on the sidelines due to the
Fed meeting. If the Fed does reduce rates, gold may come down a
little as a 25 basis point cut is already priced-in," said Brian
Lan, managing director at dealer GoldSilver Central in
Singapore.
"We are also looking at whether there will be further rate
cuts. Over the longer term we are still bullish on gold but in
the short-term we might see a bit of correction before it
continues to move higher," Lan added.
Fed funds rate futures 0#FF: are now fully pricing in a 25
basis point rate cut on Wednesday and another 25 basis point
reduction by September.
Markets will be watching out for guidance on whether the
Federal Open Market Committee's expected move is a one-time cut
or the beginning of a rate-cutting cycle.
Cementing expectations of Fed rate cuts, U.S. consumer
spending and prices rose moderately in June, pointing to slower
economic growth and benign inflation. U.S. President Donald Trump, meanwhile, reiterated his call
for the Fed to make a large interest rate cut, saying he was
disappointed in the U.S. central bank and that it had put him at
a disadvantage by not acting sooner. "Gold will look for direction in the tone of the Fed Chief's
rhetoric. More dovish could lead to a weaker dollar and a higher
price for gold," Alfonso Esparza, a senior market analyst at
OANDA, said in a note.
The dollar index .DXY was relatively unchanged against a
basket of major currencies on Wednesday after hitting a
two-month high in the previous session. USD/
In financial markets, fresh trade concerns following threats
by Trump to Beijing sent Asian shares to a six-week trough on
Wednesday. MKTS/GLOB
Trump warned China against waiting out his presidency before
finalising a trade deal, saying if he wins re-election in
November 2020, the outcome could be no agreement or a harsher
one. On the technical front, Reuters technical analyst Wang Tao
said a bullish target at $1,452 per ounce has been established
for spot gold, as it has pierced above a resistance at $1,427.
Among other precious metals, silver XAG= slipped 0.7% to
$16.46 per ounce.
Platinum XPT= jumped 1.2% to $876.11 an ounce and
palladium XPD= rose 1% to $1,529.20.

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