PRECIOUS-Gold dips but recession fears keep prices at six-year high

* Spot gold faces resistance at $1,546/oz -technicals
* Holdings of SPDR Gold Trust rise 1.34%
* Silver hits highest since September 2016

(Adds comments, recasts, updates prices)
By Eileen Soreng
Sept 4 (Reuters) - Gold eased on Wednesday as traders locked
in gains after a 1% rise in the previous session, but prices
stayed near multi-year highs on heightened fears of a global
recession, as well as uncertainties around the Sino-U.S. trade
spat and Brexit.
Spot gold XAU= fell 0.6% to $1,537.20 per ounce at 0728
GMT, but hovered near last week's $1,554.56, its highest since
April 2013.
U.S. gold futures GCv1 were also down 0.6% at $1,546.6 an
ounce.
Spot silver XAG= was up 0.5% at $19.33 per ounce, after
hitting $19.57 earlier, its highest since September 2016.
U.S. manufacturing activity contracted for the first time in
three years in August, data showed on Tuesday, renewing fears of
a sharp economic slowdown and weighing on risk sentiment.
The weak data has the increased the possibility of interest
rate cut in September, said Jigar Trivedi, a commodities analyst
at Mumbai-based Anand Rathi Shares & Stock Brokers, adding trade
uncertainties will create buying momentum in gold and silver.
Traders have almost fully priced in a 25 basis point
interest rate cut at the Federal Reserve's meeting later this
month, according to CME's FedWatch tool FEDWATCH .
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion and weigh on the dollar. The dollar index
.DXY was down 0.2% against a basket of currencies. USD/
Since prices have rallied so sharply, there might be profit
booking to the levels of $1,510-$1,515, Trivedi said.
Meanwhile, stock markets in Asia and Europe gained on the
back of strong Chinese services sector growth and a report that
indicated possible resolution to the Hong Kong protests.
MKTS/GLOB
On the trade front, U.S. President Donald Trump's threatened
on Tuesday that he would be "tougher" on Beijing in the second
term if talks dragged on. British lawmakers defeated Boris Johnson in parliament on
Tuesday in a bid to prevent him taking the country out of the EU
without a divorce agreement, prompting the prime minister to
announce that he would immediately push for a snap election.
With no agreement on the U.S.-China trade front, investors
remain nervous, said Michael McCarthy, chief market strategist
at CMC Markets, adding that uncertainties following the UK
parliamentary vote are a positive for gold.
Spot gold faces a resistance at $1,546 per ounce, a break
above which could lead to a gain into the range of
$1,568-$1,595, according to Reuters technical analyst Wang Tao.
Holdings of SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, rose 1.34% to 890.04 tonnes on
Tuesday, their highest since November 2016. Elsewhere, spot platinum XPT= rose 0.6% to $963.15 per
ounce and palladium XPD= was down 0.1% at $1,540.25.