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* Fed says will be patient on further rate hikes
* SPDR Gold holdings up 4.6 pct this month
* Markets also eye U.S.-China trade talks (Recasts, updates prices, market activity and comments)
By Arijit Bose and Sumita Layek
Jan 30 (Reuters) - Gold rose to its highest level in overeight months on Wednesday as the dollar dipped after the U.S.Federal Reserve held interest rates steady and said it would bepatient with future interest rate hikes.
Spot gold XAU= was up 0.6 percent at $1,319.15 per ounceat 4:05 p.m. EST (2105 GMT). The session high of $1,323.24 wasthe highest since May 11, 2018.
U.S. gold futures GCcv1 settled up 0.1 percent to$1,309.90.
The Fed held U.S. interest rates steady on Wednesday butsaid it would be patient in lifting borrowing costs further thisyear as it pointed to rising uncertainty about the economicoutlook.
"The fact that (Fed Chairman Jerome) Powell said there is nohurry to raise interest rates is very bullish for gold ... Itpretty much took the March rate hike off the table," said BobHaberkorn, senior market strategist at RJO Futures.
"Gold has not been able to rally because the Fed was veryhawkish and aggressive in rate hikes, now that it is off thetable, we will probably see the top lifted of gold here and seeit trade higher in 2019."
The dollar .DXY fell after the Fed held interest ratessteady and struck a cautious tone on its outlook for the economyand future interest rate increases. USD/
Earlier in the session, the greenback gained after payrollsprocessor ADP reported that the U.S. private sector had added213,000 jobs in January, beating forecasts for 178,000 new jobs.
"Although the dollar continues to benefit from safe-havenflows, buying sentiment (for the currency) is seen taking a hitif the Fed sounds more dovish than expected," Lukman Otunuga,Research Analyst at FXTM said in a note.
Last year, the dollar overtook gold to emerge as investors'favoured hedge against global economic and politicaluncertainty, but analysts have said gold is likely to be thepreferred safe haven this year.
Overall risk sentiment is also being tested by concerns thatWashington's pursual of a criminal case against Chinese companyHuawei and its chief financial officer could hurt trade talksbetween the world's two biggest economies.
U.S. and China opened a pivotal round of high-level talks onWednesday aimed at digging out from their months-long trade waramid deep differences over Chinese practices over intellectualproperty and technology transfer.
Underscoring investor interest in gold, holdings of SPDRGold TrustGLD , the world's largest gold-backedexchange-traded fund, rose 1 percent to 823.87 tonnes onTuesday, their highest since June. GOL/ETF
SPDR gold holdings have climbed 4.6 percent so far thismonth, the biggest monthly gain since September 2017.
Silver XAG= gained 1.4 percent to $16.06 per ounce. Itssession high of $16.10 was the highest since July 2018.
Palladium XPD= rose 1 percent to $1,359, while platinum XPT= was up 0.6 percent at $814.50.Arijit.Bose@thomsonreuters.com Arijit.Bose.firstname.lastname@example.org
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