(Updates prices)
* Powell's speech on current economic issues at 1300 GMT
* Gold to hover in high-$1,600 to mid-$1,700 handle: Citi
* SPDR gold holdings rise to seven-year highs
* For an interactive graphic tracking the global coronavirus spread, open https://tmsnrt.rs/3aIRuz7 in an external browser
By Brijesh Patel
May 13 (Reuters) - Gold eked out gains on Wednesday, with markets awaiting a speech by Federal Reserve Chairman Jerome Powell for more signals on the U.S. interest rate trajectory after dismal economic data.
Spot gold XAU= was up 0.3% at $1,707 per ounce by 1215 GMT. U.S. gold futures GCv1 rose 0.4% to $1,713.40 per ounce.
"Overall, the gold market is treading water because there are strong forces in both directions - we have physical jewellery demand which is very lacklustre and on the other hand we have demand coming from investors who are looking for protection for their capital," said Commerzbank (DE:CBKG) analyst Eugen Weinberg.
"Focus for today will be on what Powell will be saying after pressure from the White House to declare negative interest rates like in Europe," he said.
He added that the chances of negative U.S. rates were low.
On Tuesday, U.S. President Donald Trump again pushed the Fed to adopt negative rates after data showed U.S. consumer prices dropped 0.8% in April. week financial markets began pricing in a negative U.S. interest rate environment for the first time as investors grappled with the economic consequences of the new coronavirus outbreak. FEDWATCH
Powell will be speaking on current economic issues in a webcast hosted by the Peterson Institute for International Economics at 1300 GMT.
"While we do not expect the Fed to go to negative policy rates, and they still have plenty of other monetary tools at their disposal ... the front-end curve pricing this phenomenon may be a bullish gold market tail risk," Citi Research said in a note. even as we see the potential for gold market liquidation and broad asset market drawdowns in the next 3-6 months, we think gold trading will still mostly hover in a high-$1,600 to mid-$1,700 handle."
The U.S. central bank cut interest rates to near zero in March and has rolled out a wave of monetary measures to limit economic damage caused by the coronavirus outbreak amid a soaring unemployment rate. U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.2% to 1,083.66 tonnes on Tuesday - its highest in seven years. GOL/ETF
Elsewhere, palladium XPD= dropped 1.4% to $1,833.75 per ounce, while silver XAG= gained 0.7% to $15.52, and platinum XPT= rose 1.5% to $764.86.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For an interactive graphic tracking the global spread, open link in an external browser
https://tmsnrt.rs/3aIRuz7
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>