Gold prices rise as Middle East conflict buoys demand

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US Fed signals slower easing

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Platinum up more than 1%

(Updates prices for Asia midday session)

By Brijesh Patel and Anmol Choubey

June 19 (Reuters) - Gold prices gained on Thursday, as the Iran-Israel conflict persisted for the seventh day, boosting demand for the safe-haven asset, although the U.S. Federal Reserve's cautious stance on future rate cuts kept gains in check.

Spot gold was up 0.2% at $3,374.54 an ounce, as of 0505 GMT. U.S. gold futures eased 0.5% to $3,391.90.

"Gold has made a modest bounce as we await the next steps in the Israel-Iran conflict. If the U.S. does decide to get directly involved in the conflict this could raise the geopolitical stakes," KCM Trade Chief Market Analyst Tim Waterer said.

Geopolitical tensions remained heightened as U.S. President Donald Trump on Wednesday refrained from confirming whether the U.S. would join Israel's bombardment of Iranian nuclear and missile sites, prompting residents of Tehran to leave the city amid ongoing air strikes.

The U.S. military has moved some aircraft and ships from bases in the Middle East that may be vulnerable to any potential Iranian attack, two U.S. officials told Reuters on Wednesday.

Gold is often used as a safe store of value during times of geopolitical and financial uncertainty.

The Fed held interest rates steady on Wednesday. Fed policymakers still forecast slashing rates by half-a-percentage point this year, but they slowed the pace of future cuts.

However, Fed Chair Jerome Powell cautioned against putting too much weight on this outlook, warning of "meaningful" inflation ahead as higher import tariffs loom.

"The Fed was not as dovish as some had hoped, and I'd argue Powell was a tad more hawkish than many would like. The U.S. dollar is likely at oversold levels, and that is likely to cap gains on gold over the next few weeks," said Matt Simpson, a senior analyst at City Index.

Elsewhere, spot silver was steady at $36.74 per ounce, platinum rose 1% to $1,336.08, while palladium gained 1.2% to $1,061.37.

(Reporting by Brijesh Patel and Anmol Choubey in Bengaluru; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala)