* Market focus turns to Fed leadership
* Gold seen consolidating at $1,275-$1,285, trader says
* Palladium expected to keep outperforming - analyst
(Updates prices) LONDON, Oct 24 (Reuters) - Gold prices dipped on Tuesday as investors nervously awaited news on the next head of the U.S. central bank, while strong share markets and a calmer geopolitical environment sapped safe-haven demand. "The hawkish speculation about a new Fed chair has added some downside pressure," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. President Donald Trump told reporters on Monday he was "very, very close" to making his decision on who should chair the U.S. Federal Reserve. A hawkish candidate would be expected to favour higher interest rates, boosting the value of the dollar and making greenback-denominated gold more expensive for holders of other currencies.
Spot gold had slipped 0.5 percent to $1,275.81 an
ounce by 1425 GMT, after hitting its lowest since Oct. 6 at $1,271.86 in the previous session.
U.S. gold futures for December delivery fell 0.3
percent to $1,277.40 per ounce. Spot gold has shed 6 percent since touching a one-year high of $1,357.54 on Sept. 8, largely due to a rebound in the dollar on expectations that the Fed will boost interest rates in December. The Fed is expected to raise rates in December and twice next year, according to a Reuters poll of economists, who now worry that the central bank will slow its tightening because of expectations that inflation will remain low. "Stocks, even though we had a correction yesterday, are holding near record highs, removing some of the demand on that front. Geopolitics have faded a bit recently and that has added to the downwards move," Hansen added.
MSCI's 47-country world share index hovered
near its recent all-time highs after a drop in General Electric shares on Wall Street had seen the ViX volatility index spike up. "I'm very surprised we're up here. Risk is still on if you look at stock markets. Generally gold should be lower ... I was expecting gold to drift down to the $1,260 area," said a Hong Kong-based trader. "We'll probably consolidate around $1,275-$1,285 until some Fed news comes out."
Silver fell 0.6 percent to $16.94 an ounce, after
hitting its lowest since Oct. 9 in the previous session.
Platinum dropped 0.2 percent to $918.95 an ounce while palladium was unchanged at $959 an ounce.
"I think there's still belief in the market that palladium can continue to outperform," Hansen said. "If we see the (palladium-platinum) spread widen above $50 then we could probably see another extension up towards the $75 area." Palladium has more than doubled in value since touching a 5-1/2-year low in January last year while platinum has gained only 15 percent in the same period.
(Additional reporting by Apeksha Nair in Bengaluru, editing by David Evans)