* SPDR Gold holdings fall for second day
* Gold range bound, prospects of break higher (Updates throughout, new quotes)
By Zandi Shabalala
LONDON, Aug 19 (Reuters) - Gold fell more than 1 percent on Friday, snapping a week-long streak of gains following conflicting signals from U.S. Federal Reserve officials on the timing of a possible rate hike, but was still on track to end the week higher.
Spot gold XAU= fell as much as 1.5 percent to a session low of $1,337.37 per ounce, paring losses by 1416 GMT to trade down 0.44 percent at 1,345.90. The yellow metal was still heading for a weekly gain of around 0.7 percent.
U.S. gold GCcv1 dropped 0.68 percent to $1,347.80 an ounce.
Gold is sensitive to higher rates which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
There have been mixed signals this week from Federal Reserve policymakers, leaving the market anticipating more direction at next week's annual meeting of central bankers from around the world in Jackson Hole, Wyoming, at which Fed Chair Janet Yellen is seen likely to cement expectations for a slow pace of rate increases. have had conflicting statements from the Fed and its created quite a lot of confusion as to the thinking, so now the market is waiting to hear what Yelland's thoughts on the world and economic growth," Ole Hansen, head of commodity strategy at Saxo Bank.
"Overall the market is in wait-and-see mode ahead of next week Thursday's meeting."
Signals are neutral for spot gold as it is stuck in a range of $1,337.22-$1,358.01 per ounce, Reuters technical analyst Wang Tao said.
Reports showed the number of Americans filing for unemployment benefit fell more than expected last week, while manufacturing activity in the U.S. Mid-Atlantic region saw a mild improvement this month. market pricing on balance suggests investors are growing no more convinced of the case for raising rates, with the chances of a quarter point rise in December around 40 percent.
Saxo's Hansen said the underlying support for gold remains, with the overall growth outlook not removing the incentive for alternative safe-haven investments such as gold.
Holdings of SPDR Gold Trust, the world's largest gold-backed ETF, fell for a second day. GOL/ETF
The dollar against a basket of six major currencies .DXY was up about 0.31 percent at 94.447.
Spot silver XAG= was down 2.19 percent at $19.30 an ounce, while platinum XPT= inched lower at $1,111.24.
Palladium XPD= was down 1.04 percent at $705.47, after hitting an one-week high of $717.70 on Thursday.
(Additional reporting By Nallur Sethuraman in Bengaluru; editing by Jason Neely and David Evans)