July 19, 2019 / 4:07 AM / in a month

PRECIOUS-Gold eases after breaching $1,450/oz on rate-cut hopes, Iran tensions

* Gold on course for second weekly rise

* SPDR Gold holdings jump 1.4% on Thursday

* Silver on track for best week since July 2016

* Spot gold may climb to $1,461 per ounce - technicals (Updates prices)

By Brijesh Patel

July 19 (Reuters) - Gold eased on Friday as investors locked in profits after the bullion surpassed $1,450 an ounce for the first time in more than six years on dovish signals on monetary policy from the U.S. Federal Reserve and fresh tensions in the Middle East.

Spot gold hit $1,452.60 an ounce in early trade, its highest since May 2013, and was down 0.5% at $1,439.41, as of 0741 GMT.

The metal is on track for a second straight weekly gain.

U.S. gold futures jumped about 1% to $1,440.50.

At a central banking conference on Thursday, New York Fed President John Williams said policymakers need to add stimulus early to deal with lower inflation when interest rates are near zero and cannot wait for an economic disaster to unfold.

“Depending on how you want to look at Williams’ comments last night, it was an academic report, but cutting to the layer of the bait and getting to the meat of the argument, it is dovish,” said Stephen Innes, managing partner, Vanguard Markets.

“Gold is trading above $1,400, we are nowhere near threatening to go back to $1,360 or $1,375, and there is so much buying going on. Expect gold prices to continue to march higher.”

The comments from Williams made it a virtual certainty the Fed would opt to cut interest rates by 25 basis points (bps) at its July 30-31 policy meeting and also fuelled expectations of an even deeper 50 bps reduction.

In the wake of Williams’ comments, the dollar fell to a near two-week low on Thursday, before firming slightly in early Asian trade.

Uncertainty in the Middle East also boosted the metal’s safe-haven appeal. The United States said on Thursday a U.S. Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone.

“The extra push for gold prices came from comments by Williams which implied quite aggressive rate-cutting, plus the Iranian drone news and the seizure of a tanker by the Iranians in the Straits of Hormuz,” said Nicholas Frappell, global general manager at ABC Bullion.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1.42% to 814.62 tonnes on Thursday from Wednesday.

Spot gold may climb to $1,461 per ounce, as it has cleared a resistance at $1,439, said Reuters technical analyst Wang Tao.

Silver rose 0.5% to $16.42 per ounce, having earlier scaled its highest since June 2018 at $16,46. The metal is on track for its best week in three years.

Platinum gained 0.8% to $855.35, while palladium shed 0.3% to $1,520.97 an ounce. (Reporting by Brijesh Patel and Harshith Aranya in Bengaluru; editing by Richard Pullin and Gopakumar Warrier)

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