PRECIOUS-Gold down as December U.S. rate hike seen more likely

* Gold volatility seen increasing

* SPDR Gold holdings rose 0.60 pct Wednesday

* Silver off 2-week highs hit early in the day

* Palladium off highest since Sept 8

(Updates throughout, changes BENGALURU dateline)

By Zandi Shabalala

LONDON, Sept 22 (Reuters) - Gold fell on Thursday as the

U.S. Federal Reserve signalled an interest rate increase by the

end of the year after policy was kept unchanged in September, as

expected.

Bullion gained late on Wednesday as the Fed sta

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