PRECIOUS-Gold holds steady as investors eye Fed's interest rate strategy

* Fed monetary policy meeting on July 30-31
* Interest rate futures fully priced for quarter-point rate
cut
* SPDR Gold holdings dipped 0.14% on Friday

(Updates prices)
By Eileen Soreng
July 29 (Reuters) - Gold was little changed on Monday as
caution set in ahead of this week's U.S. Federal Reserve
meeting, with investors likely to look beyond an expected rate
cut to the central bank's guidance on monetary policy for the
rest of the year.
Spot gold XAU= edged up 0.1% to $1,420.10 per ounce at
1149 GMT.
U.S. gold futures GCcv1 were little changed at $1,419.70
an ounce.
"A rate cut is entirely priced in while a 50 basis points
cut is extremely unlikely. So guidance becomes absolutely key,"
OANDA senior market analyst Craig Erlam said.
"(Gold's movement) will depend on how dovish or how far ajar
Jerome Powell leaves the door on these rate cuts in the months
ahead."
For the first time since the financial crisis, 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.
"Much will also depend on what Fed Chair Powell says in the
subsequent press conference: if he makes no mention of a cycle
of rate cuts, causing gold to come under pressure, we would not
see this as a trend reversal but as an attractive buying
opportunity," analysts at Commerzbank said in a note.
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. FEDWATCH
Traders will also keep a close eye on the U.S. and Chinese
trade talks in 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.
On the technical front, $1,400 will be the key downside
support for gold, and beyond that, $1,380, OANDA's Erlam said.
"Bulls are very reluctant to let go just yet, but if we do
see those levels break, we might see gold bulls head for the
exits quite quickly."
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.
SPDR Gold Trust GLD , the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.1% to 818.14
tonnes on Friday. GOL/ETF
Among other precious metals, silver XAG= dipped 0.1% to
$16.38 per ounce.
Palladium XPD= fell 0.6% to $1,526.25 per ounce, while
platinum XPT= climbed 1.2% to $870.03.