* Bullish positions in COMEX gold, silver contracts cut
* Dollar pares losses, but on track for worst month since Jan 2018 (Updates prices)
By K. Sathya Narayanan
Oct 21 (Reuters) - Gold eased on Monday on improved appetite for riskier assets, while investors awaited further clarity from the U.S. Federal Reserve on more possible interest rate cuts this year.
Spot gold was down 0.3% at $1,485.03 per ounce as of 1:52 p.m. EDT (1752 GMT). U.S. gold futures settled down 0.4% at 1,488.10.
“Equity markets are doing pretty well. That means risk appetite is there, but at the same time, the dollar is rebounding a little bit and two year (Treasury yields) rates moved higher,” said Bart Melek, head of commodity strategies at TD Securities.
Appetite for riskier assets improved on hopes for a resolution to the protracted U.S.-China trade war and Britain avoiding a European Union exit.
The dollar rebounded slightly, pressuring bullion, but was still heading for its worst month since January 2018, against its key rivals.
A strong dollar makes greenback denominated gold costlier for investors holding other currencies, while higher Treasury yields increase the opportunity cost of holding non-yielding bullion.
“We continue to have ambiguity about central bank monetary policy, there is some hope that the U.S. economy will do better than thought. Various Fed speakers are telling that additional rate cuts, moving into 2020, may not be on the cards,” Melek said.
Bullion has risen about 16% so far this year and one of the major supporting factors is hope for further rate cuts by the Fed. However, amid mixed signals from Fed policymakers it is unclear if they, overall, will support a cut.
Federal fund futures show that traders see an 87% chance for a 25 basis-point rate cut by the U.S. central bank in its month-end monetary policy meeting.
“Ultimately the main driver in gold is the U.S. Fed and what they’re doing with the (interest) rates,” Bob Haberkorn, senior market strategist at RJO Futures said.
Meanwhile, hedge funds and money managers cut their bullish positions in COMEX gold and silver contracts in the week to Oct. 15, data showed on Friday.
Elsewhere, silver rose 0.1% to $17.56 per ounce, while platinum was down 0.2% at $887.09.
Palladium was up 0.1% at $1,756.55 an ounce, having hit an all-time high of $1,783.21 last week.
“Sell rates for palladium reached the highest level since January. This suggests the recent rally has been driven by fundamentals, rather than speculative interest,” ANZ Bank said.
“And with the market likely to remain tight for the foreseeable future, we believe there is plenty more upside for (palladium) prices,” ANZ added in a note. (Reporting by K. Sathya Narayanan in Bengaluru; Editing by Alexander Smith, Chris Reese and Tom Brown)