PRECIOUS-Gold gains as investors bet on dovish signals from Fed

* Two-day Fed meeting ends on Wednesday
* Traders stop pricing in negative interest rates
* SPDR gold holdings dipped Friday
* Specs cut bullish positions in COMEX gold in week to June
2

(Updates prices)
By Shreyansi Singh
June 8 (Reuters) - Gold rose on Monday after the previous
session's steep fall, boosted by hopes of dovish monetary policy
from the U.S. Federal Reserve.
Spot gold XAU= rose 0.7% to $1,696.79 per ounce by 1:53
p.m. EDT (1753 GMT). U.S. gold futures GCv1 settled up 1.3% at
$1,705.1.
"The Fed will continue to have uber dovish policies, they
will continue to suppress real rates and that's the main driver
for gold purchases over the last few months," said Daniel Ghali,
commodity strategist at TD Securities, adding that the macro
implications will continue to support gold.
Bullion fell as much as 2.4% to $1,670.14 on Friday, its
lowest in over a month, after an unexpected rise in U.S.
employment increased hopes for a swift recovery in the global
economy and boosted investor appetite for riskier assets.
MKTS/GLOB
Gold's uptick was also technical in nature, Saxo Bank
analyst Ole Hansen said.
"The break below $1,700 on Friday is once again attracting
some demand from investors, who have been waiting on the
sidelines for a correction."
Market participants are now waiting for the U.S. central
bank's two-day policy meeting, which ends on Wednesday, but have
stopped pricing in the possibility of negative interest rates
after Friday's jobs report. Gold tends to gain when interest rates are low, which
reduces the opportunity cost of holding non-yielding bullion.
Gold is also seen as a hedge against inflation.
Holdings in the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust GLD , dipped 0.4% on Friday. Speculators
also cut their bullish positions in COMEX gold in the week to
June 2. CFTC/ GOL/ETF
In other precious metals trading, spot silver XAG= rose
1.6% to $17.65 an ounce, platinum XPT= fell 0.42% to $832.51
per ounce and palladium XPD= jumped 2.7% to $2,005.61.