* U.S. Fed cuts rates for a second time this year
* Focus now on Bank of Japan on Thursday
* Oil prices ease after surge on Saudi attack(Adds comments, updates prices)
By Asha Sistla and Swati Verma
Sept 18 (Reuters) - Gold prices fell over 1% to a one-weeklow on Wednesday, pulled down by a lack of clarity on futuremonetary policy decisions after a widely anticipated interestrate cut by the U.S. Federal Reserve.
The U.S. central bank went ahead with an expected interestrate cut of 25-basis points for the second time this year, butgave mixed signals about what may happen next.
Spot gold dropped to $1,487.35 per ounce at 02:50p.m. EDT (1850 GMT). U.S. gold futures settled up over$2, or 0.2%, at $1,515.80.
"Gold retreated $10 from just before the release as the Fedslightly disappointed the market as only 7 out of 17 members sawone more rate cut by the end of this year," said Tai Wong, headof base and precious metals derivatives trading at BMO.
"The projections for 2020/21 were also measured and longterm view remains unchanged," Wong added.
Lower interest rates decrease the opportunity cost ofholding non-yielding bullion.
The dollar index gained 0.4% versus major currencies,further pressuring the precious metal.
Investors are now focused on the Bank of Japan's policymeeting on Thursday.
Meanwhile, safe-haven buying of bullion was limited whenoil prices slid after Saudi Arabia said it would restore crudeproduction hit by attacks on facilities that prompted oil pricesto spike earlier this week.
Gold is considered a hedge against oil-led inflation.
Among other precious metals, silver fell 2.3% to$17.60 an ounce, while platinum fell about 2% to $924.40.
Palladium fell 0.9% to $1,584.06 after it hit arecord of $1,626.81 on Monday.
"(In terms of) overall fundamentals for palladium, we have asignificant deficit that has to be financed from above groundstocks, with the prospect of increased supply limited," saidJames Steel, chief precious metals analyst at HSBC.
"Mine supply in the short term cannot respond to the highprice so we have to mobilize above ground stocks and the(palladium) market consequently is tight. So we do get periodicprofit-taking and we've had a spate of negative news from theauto industry but despite that, it's tight."(Reporting by Asha Sistla and Swati Verma in BengaluruEditing by David Gregorio and Alistair Bell)