PRECIOUS-Gold heads for first weekly loss in four; Powell's speech in focus

* Gold down nearly 1.3% this week
* Palladium on track for third weekly gain
* SPDR Gold holdings up 0.3%

(Updates prices)
By Brijesh Patel
Aug 23 (Reuters) - Gold edged lower on Friday, heading for
its first weekly decline in four, as investors locked in profits
from bullion's recent strength as they awaited clarity on U.S.
interest rate cuts from the Federal Reserve chairman's speech at
Jackson Hole.
Spot gold XAU= was down 0.3% at $1,494.76 an ounce by 1112
GMT, on track for a 1.3% weekly decline, while U.S. gold futures
GCcv1 dipped by 0.3% to $1,504.60.
"Markets are looking for further guidance in the near term
on rate cuts. That's the reason gold has been consolidating over
the past few days, given no clear direction provided by any data
or news," said Julius Baer analyst Carsten Menke.
Fed Chair Jerome Powell's speech at a gathering of central
bankers in Jackson Hole later in the day (1400 GMT) could shed
more light on monetary policy after minutes of the Fed's July
meeting tempered hopes of sharp rate cuts. Underscoring divisions within the Fed, two central bank
officials on Thursday said that the U.S. economy does not need
more stimulus at this point, though another said he was
"open-minded". Lower interest rates decrease the opportunity cost of
holding non-yielding bullion and weigh on the dollar.
However, denting bullion's appeal, the dollar index .DXY
was up 0.2% on Friday and was on track for a second consecutive
weekly rise. USD/
"We've been seeing some profit-taking over the past few
days," Julius Baer's Menke said.
"Given that we still have quite elevated uncertainties in
financial markets related to growth outlook, trade tension, this
is an entry opportunity for investors. That's why the downside
for prices will be limited."
Despite this week's declines, gold prices have risen nearly
6% so far this month. Widely viewed as a safe-haven asset, gold
has gained support from concerns over U.S.-China trade and
global growth.
In the U.S. bond market, the two-year/10-year yield curve
briefly moved back into inversion territory overnight, a shift
that also occurred last week and hit financial markets amid
worries that it presaged a sharp global downturn.
Indicative of sentiment, holdings in SPDR Gold Trust GLD ,
the world's largest gold-backed exchange-traded fund, rose 0.3%
to 854.84 tonnes on Thursday. GOL/ETF
"From a technical point of view, we are seeing some
temporary weakness on gold but the main trend remains solid,
with a first resistance placed at $1,535," ActivTrades analyst
Carlo Alberto De Casa said in a note.
Elsewhere, silver XAG= gained 0.3% to $17.05 an ounce,
while platinum XPT= eased 0.1% to $856.28.
Palladium XPD= fell 0.5% to $1,479.03 an ounce, but the
auto catalyst metal remained on track for a third straight
weekly gain, up 2.2% so far this week.