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PRECIOUS-Gold jumps to 6-week top after Fed statement, U.S. dollar drops

* Gold turns higher after Fed statement

* Fed holds rates flat as expected

* Dollar turns lower, U.S. Treasury yields drop

(New throughout, adds Fed statement, updates prices, market activity and comment; adds second byline and dateline, previous LONDON) NEW YORK/LONDON, July 26 (Reuters) - Gold jumped 1 percent to a six-week high on Wednesday, after the U.S. Federal Reserve said it would start to wind down its massive holdings of bonds "relatively soon," pushing the dollar lower. The U.S. central bank kept interest rates unchanged as expected and said it was continuing the slow path of monetary tightening that has lifted rates by a percentage point since 2015, the Fed said in a statement following a two-day meeting.

Spot gold rallied 1.1 percent to $1,262.11 an ounce

the highest since June 15.

Before the Fed statement, U.S. gold futures for

August delivery settled down 0.2 percent at $1,249.40. "Gold clawed back recent losses and surged to fresh highs of the rally as the Fed confirmed it was on a summer sabbatical with a safe statement that nodded to lower inflation but was offset by a confirmation that balance sheet tapering would occur 'relatively soon,"' said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.

The dollar fell to a 13-month low against a basket of

major currencies after the Fed statement. U.S. 10-year Treasury

yields also fell, providing support to bullion.

Lower yields decrease the opportunity cost of holding non-yielding gold, while a weaker greenback makes dollar-priced bullion less expensive for holders of other currencies. "They weren't quite ready to start the clock on letting bonds roll off their balance sheet, but saying it's coming 'relative soon' is in line with our view that it's on tap for the September decision," said Avery Shenfeld, chief economist for CIBC Capital Markets. Prior to the statement, expectations of another rate hike before the end of the year were less than 50 percent. "We expect the Fed to delay its next rate hike until December this year, with risks skewed toward a longer pause given the possibility that core inflation takes longer to recover. We expect two rate hikes next year." ABN Amro economist Nick Kounis said in a note.

Holdings at the SPDR Gold Trust , the world's largest

gold-backed exchange-traded fund, fell 1.13 percent to 800.45 tonnes on Tuesday from 809.62 tonnes on Monday, weighing on gold prices earlier in the session.

In other precious metals, silver turned higher and

was up 0.8 percent at $16.59 per ounce.

Platinum edged up 0.03 percent to $923.75 per ounce, while palladium rose 1.1 percent to $866.40 per ounce.

(Additional reporting by Nithin Prasad and Arpan Varghese in Bengaluru; Editing by Elaine Hardcastle and David Gregorio)