BENGALURU, Sept 20 (Reuters) – Gold prices held steady on Thursday, after rising in the previous session, as the dollar softened amid easing Sino-U.S. trade tensions and investors wait on direction from next week’s U.S. Federal Reserve meeting.FUNDAMENTALS: * Spot gold was little changed at $1,203.86 by 0106 GMT, after rising 0.5 percent in the previous session. * U.S. gold futures were up 0.1 percent at $1,209 an ounce. * Investors are awaiting next week’s Federal Reserve meeting. The U.S. central bank is widely expected to raise benchmark interest rates and shed light on the path for future rate hikes. * Higher rates dent demand for non-interest yielding gold and in turn boost the dollar in which it is priced. * The dollar index was hovering near a seven-week low against a basket of major currencies. * China said on Wednesday it will not stoop to competitive devaluation of its currency, hours after it hit back with a softer punch than the one landed by the United States in their escalating tariff dispute. * On Tuesday, Beijing added $60 billion of U.S. products to its import tariff list in retaliation for President Donald Trump’s planned levies on $200 billion worth of Chinese goods. * The tariffs, however, were seen to be at lower levels than some had feared, easing some concerns after the months-long trade battle between the world’s leading economies threatened to dim global growth prospects. * Investors have been buying the dollar in the belief the United States has less to lose from the dispute. But a spot of weakness in the dollar indicated that worries over trade tensions have eased. * U.S. homebuilding increased more than expected in August, a positive sign for the housing market which has underperformed the broader economy amid rising interest rates for home loans. * India should not tamper with its gold import duty or impose other restrictions to support the rupee, the World Gold Council said on Wednesday, as the government considers ways to cut “non-necessary” imports to stem an outflow of dollars. * Autocatalyst metal palladium rose 2.5 percent on Wednesday, marking its highest since April 19 at $1,041.70. It was last up 0.1 percent at $1,035.30.