PRECIOUS-Gold climbs on Fed meeting and geopolitics

    * Spot gold needs to break above $1,322 -analyst
    * U.S. delegation in Beijing on Thursday and Friday

 (Adds Julius Baer analyst, updates prices)
    By Eric Onstad
    LONDON, May 3 (Reuters) - Gold prices gained on Thursday
after the U.S. central bank reassured investors that increases
to interest rates would be gradual, with geopolitical
uncertainties also providing support.
    Spot gold        rose for a second session, firming by 0.9
percent to $1,316.63 an ounce by 1225 GMT, while U.S. gold
futures         for June delivery added 0.9 percent to
    The U.S. Federal Reserve said that inflation on a 12-month
basis was "expected to run near the committee's symmetric 2
percent objective".             
    "Yesterday's FOMC meeting didn't spark much fireworks, but
it eased concerns over whether the Fed was going to stick to its
gradual tightening policy, which I believe they are," said Ole
Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
    "The key change is they added the word 'symmetric', which
was taken as a sign that they would allow inflation to
overshoot, which is positive for gold."
    Gold is highly sensitive to rising U.S. interest rates
because it becomes less attractive compared with
interest-bearing assets.
    Julius Baer economists expect the Fed to shift its guidance
to four rate hikes this year, from three, which will weigh on
gold, said Carsten Menke, commodities analyst at the Swiss bank.
    "Rising rates and a temporarily stronger dollar should bring
sufficient headwinds to push prices below $1,300 over the coming
months," he added. 
    Uncertainties were providing a supportive background for
bullion, including U.S.-China trade talks and the potential U.S.
withdrawal from the Iranian nuclear accord.
    "Safe-haven buying has been absent of late ... But there
have been some signals for the past few days that the
(U.S.-China) negotiations won't be as smooth as expected. That
would definitely be a focus, particularly now we have got past
the FOMC meeting," said ANZ analyst Daniel Hynes. 
     Meanwhile, gold demand has made its weakest start to a year
since 2008, the World Gold Council said on Thursday, with
stagnant prices and the threat of rising interest rates leading
investors to seek better returns elsewhere.             
    Among other precious metals, spot silver        rose 1.1
percent to $16.53 an ounce, platinum        climbed by 1.6
percent to $903.80 and palladium        was up 1.2 percent at

 (Additional reporting by Eileen Soreng in Bengaluru
Editing by David Goodman)