* Gold down nearly 1.2% so far this week
* Palladium on track for third weekly gain
* SPDR Gold holdings up by about 27 tonnes this month (Updates prices)
By Harshith Aranya
Aug 23 (Reuters) - Gold eased on Friday and was set for its worst week in nearly five months, as lack of clarity from the U.S. Federal Reserve on the outlook for interest rate cuts triggered investors to cash in some gains ahead of Jerome Powell’s speech at Jackson Hole.
Spot gold was down 0.2% to $1,495.80 per ounce, as of 0805 GMT.
The metal has lost nearly 1.2% so far this week, on track for its biggest weekly percentage decline since March 29.
U.S. gold futures also slipped 0.2% to $1,505.50 an ounce.
The market is closely watching Fed Chairman Powell’s speech at the Jackson Hole seminar due later in the day (1400 GMT) for clarity on monetary policy after minutes of the U.S. central bank’s July meeting tempered hopes of aggressive rate cuts.
“There is no clear direction on what the Fed is doing, so people are on the sidelines until they hear concrete answers,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
“Some people are taking out profits off the table,” he added.
Underscoring divisions within the Fed, two central bank officials said on Thursday the U.S. economy does not need more stimulus at this point while another said he was “open-minded.”
Meanwhile, in the U.S. bond market, the two-year, 10-year Treasury yield curve briefly moved back into inversion overnight. This inversion has heralded several past U.S. recessions.
It had flashed recession red lights last Wednesday for the first time since the 2007-08 financial crisis.
“There are still concerns about the economy, trade uncertainty, geo-political tensions; all these things have not gone away, which is supportive for gold,” said John Sharma, an economist with National Australia Bank.
Gold is used as a safe investment during times of political and financial uncertainty.
Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, have increased by about 27 tonnes so far this month.
Traders are also awaiting the Group of Seven summit this weekend for clues on what additional steps policymakers may take to boost economic growth.
On the technical side, a bullish target at $1,524 per ounce has been aborted for spot gold, as it has more or less broken a support at $1,497, said Reuters technical analyst Wang Tao.
Among other precious metals, silver was flat at $17.01 per ounce; while platinum rose 0.2% to $858.76, keeping it on course for a weekly gain.
Palladium also rose 0.2% to $1,489.52 per ounce, putting the autocatalyst on track for a third consecutive weekly rise, gaining 2.9% so far this week.
Reporting by Harshith Aranya and Brijesh Patel in Bengaluru; Editing by Sriraj Kalluvila and Rashmi Aich