* Gold awaits direction, trapped in $20 range below $1,550 * Gold due for deep correction - technicals [ID:nL3E7H8041] (Adds detail, comment; updates prices) By Rujun Shen SINGAPORE, June 8 (Reuters) - Gold was steady on Wednesday as investors waited for hints on the U.S. central bank's next policy move after its chairman acknowledged the economy had slowed, while a slight rebound in the dollar weighed on prices. Gold breached $1,550 for the second straight session on Tuesday, but failed to close above that key level as the lack of clues on further stimulus plan in Federal Reserve Chairman Ben Bernanke's remarks kept investors on edge. "Gold lacks momentum for a rally but does not have much room on the downside," said Li Ning, an analyst at Shanghai CIFCO Futures. "We need some earth-shattering news to stimulate the market." If the Fed flagged further quantitative easing, it would drive investors, wary of future inflation, to store their value in bullion, traders say. But IMF acting chief John Lipsky said the Fed does not need to consider additional monetary policy stimulus as the world's largest economy is likely to pick up in coming quarters due to growth in exports and disposable incomes.[ID:nT9E7GG02L] Spot gold ticked down about 0.1 percent to $1,541.50 an ounce by 0611 GMT, snapping a three-day winning streak. U.S. gold GCcv1 was little changed at $1,543. A slight increase in the dollar , from one-month lows hit after Bernanke's sombre assessment of the U.S. economy and a Chinese official's warning on holding excessive dollar-denominated assets, weighed on gold prices. Gold is likely trapped in a range between $1,530 to $1,550 before any decisive move, traders and analysts said. Technical analysis suggested that gold could be due for a deep correction, according to a Reuters market analyst Wang Tao. [ID:nL3E7H8041] U.S. ECONOMIC CONCERNS SUPPORT GOLD A raft of sluggish data recently showed the U.S. economy was losing steam, just as the Fed's $600 billion bond purchase programme -- which has flooded markets with cheap cash and boosted prices of gold and other commodities -- is due to complete by the end of the month. Potentially supportive of gold, an increasing number of Republicans said a brief U.S. default might be an acceptable price to pay if it forces the White House to deal with runaway spending. [ID:nN07154296] "This has significant downside risks for industrial raw material, and is highly positive for precious metals. It has dire implications for the economy at a time when the macro data is softening," said Ben Westmore, commodities economist at National Australia Bank. Spot silver lost as much as 1.2 percent to $36.66, before rebounding slightly to $36.91, down half a percent. "The discouraging economic outlook has affected the stock market, as well as metals with industrial applications, such as silver," said a Hong Kong-based dealer. Asia stocks softened on Wednesday, after the comments from Bernanke added to fears about the strength of the global economy. Silver, which leads the precious metals complex with a near 20-percent year-to-date rise, is expected to outperform other precious metals over the long term, as investors may continue to favour its leverage to gold, said Austria-based hedge fund Superfund.[ID:nL3E7H70Y8] Platinum group metals also edged lower. Spot platinum dropped 0.4 percent to $1,820.99. Spot palladium fell 0.3 percent to $801.97, after rising to a three-month high of $807.50 on Tuesday. Precious metals prices 0611 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1541.50 -1.35 -0.09 8.60 Spot Silver 36.91 -0.20 -0.54 19.60 Spot Platinum 1820.99 -7.56 -0.41 3.03 Spot Palladium 801.97 -2.41 -0.30 0.31 TOCOM Gold 3977.00 -23.00 -0.58 6.65 54042 TOCOM Platinum 4735.00 7.00 +0.15 0.83 8072 TOCOM Silver 95.00 -0.10 -0.11 17.28 903 TOCOM Palladium 2077.00 34.00 +1.66 -0.95 449 COMEX GOLD AUG1 1543.00 -1.00 -0.06 8.55 10779 COMEX SILVER JUL1 36.93 -0.12 -0.31 19.36 5340 Euro/Dollar 1.4669 Dollar/Yen 80.01 TOCOM prices in yen per gram. Spot prices in $ per ounce. COMEX gold and silver contracts show the most active months (Additional reporting by Nick Trevethan in SINGAPORE; Editing by Himani Sarkar)

Source