* Dollar slips, gives up overnight gains
* U.S., Gulf allies discuss possible response to Saudiattack
* Bank of Japan leaves interest rates unchanged(Recasts, updates prices)
By Brijesh Patel
Sept 19 (Reuters) - Gold rose back above $1,500 a ounce onThursday as the focus returned to global growth risks and MiddleEast tensions, helping bullion recover after the U.S. FederalReserve cut interest rates but gave mixed signals on any futureeasing.
Spot gold was up 0.6% at $1,502.53 per ounce as of1204 GMT, after falling on Wednesday to $1,484.16, a one-weeklow.
U.S. gold futures dipped 0.4% to $1,509.30 an ounce.
"We've repeatedly seen any dips below $1,500 or towards$1,490 meet buying interest as market participants see lowerprices as a buying opportunity," Commerzbank analyst CarstenFritsch said.
"They still expect gold to trade higher in the medium term,because of a favourable environment of lower, negative interestrates, persistent political and economic risk and growingtensions in the Middle East."
The Fed cut rates for the second time this year by a quarterpercentage point as policymakers battle a slowdown in globalgrowth, but the U.S. central bank signalled further cuts wereunlikely as the labour market remained strong.
"The market is just digesting a hawkish rate cut from theFOMC (Federal Open Market Committee). The FOMC seems very splitin terms of how aggressive they need to be cutting rates furtherand that has taken (off) some support from gold," Saxo Bankcommodity strategist Ole Hansen said.
"The short term could be a little bit challenging for gold.The market is stuck in the $1,512-$1,480 range and with apotential lack of bullish news, there is a risk we could see adeeper correction, but the overall bullish outlook for gold isstill intact."
Earlier in the day, the Bank of Japan kept monetary policysteady as expected.
However, central banks around the world face increasingpressure to dole out monetary support as the U.S.-China tradewar hurts global growth.
Lower interest rates decrease the opportunity cost ofholding non-yielding bullion and weigh on the dollar.
Meanwhile, the dollar slipped, giving up overnightgains.
"The fact that gold is not trading lower after a less dovishFed is a testament to gold's resilient demand as an alternativeasset," AxiTrader strategist Stephen Innes said in a note.
On the geopolitical front, the United States was discussingwith Saudi Arabia and other Gulf allies possible responses to anattack on Saudi oil facilities.
Silver gained 0.7% to $17.87 an ounce, while platinumrose 0.4% $933.66. Palladium edged 0.1% higher to$1,593.10.(Reporting by Brijesh Patel in Bengaluru; Editing by DaleHudson and David Evans)