PRECIOUS-Autocatalysts reignite, gold stalls for Fed direction

* Palladium set for best day in 18 months

* Fed expressing growth concern could be gold positive – analyst

* Evergrande domestic debt deal calms immediate contagion concern (Recasts, adds comment, updates prices)

Sept 22 (Reuters) – Palladium jumped 8% and platinum over 5% on Wednesday, lifted by an overall uptick in commodities as jitters over China Evergrande faded, helping the autocatalysts recover some ground from a slide driven by a slowdown in the auto sector.

Gold, meanwhile, consolidated as investors steered clear of making big bets ahead of expected cues from the U.S. Federal Reserve on its tapering strategy.

Palladium surged as much as 8.4% to $2,066.61, set for its best day since March 2020, while platinum climbed about 6% to $1,011.

“There’s a belief that platinum and palladium got over-sold, and concerns that a Chinese slowdown story caused by the Evergrande crisis was overdone,” said Ed Moya, senior market analyst at brokerage OANDA.

The overall sell-off has probably run its course, and the market is starting to believe that the U.S. economy is strong enough to withstand a taper announcement later this year, Moya added.

Silver too followed along, climbing 2% to $22.91 per ounce.

But the longer a chip shortage hobbling vehicle production lasts, the weaker palladium’s recovery may be, analysts said.

Spot gold, meanwhile, inched up 0.2% at $1,777.74 per ounce by 12:29 pm EDT (1629 GMT), while U.S. gold futures rose 0.04% to $1,778.90.

The sentiment is nervous as markets remain in “wait-and-see” mode ahead of the Fed announcement, Saxo Bank analyst Ole Hansen said.

If the Fed “expresses a bit of a concern for growth starting to slow down, it could be taken as a positive for gold, because that could indicate the Fed will not be hitting the brakes as hard as the market would have thought,” Hansen said.

Post the Fed policy statement at 2 p.m. ET (1800 GMT), investors will turn to Chair Jerome Powell’s news conference.

Gold is considered a hedge against higher inflation, but a Fed rate hike would dull bullion’s appeal as that would increase the opportunity cost of holding the non-yielding metal.

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