CORRECTED-GLOBAL MARKETS-Stocks fall as dollar rises, gold falls with Fed rate path in question

By Sinéad Carew and Amanda Cooper

NEW YORK/LONDON, Sept 24 (Reuters) - MSCI's global equities gauge stayed close to flat on Wednesday while the dollar rose and gold prices dipped, as investors digested cautious comments from Federal Reserve Chair Jerome Powell about when the central bank might next cut U.S. interest rates.

In his first remarks since the Fed meeting ended with a rate cut last week, Powell on Tuesday underlined the need for policymakers to balance the competing risks of high inflation and a weaker jobs market in their next monetary policy decisions.

However, traders were still pricing in a rate cut in October, according to CME Group's FedWatch tool.

"Despite a fairly quiet day in terms of major directional market drivers, equities have trended lower on anxiety over whether or not the Fed cuts rates at each meeting for the balance of this year," said Gene Goldman, chief investment officer at Cetera Investment Management in El Segundo, California. He pointed to Powell's comments along with economic data released on Wednesday and anxiety ahead of an inflation reading due Friday.

Wednesday's data showed sales of new U.S. single-family homes surged in August by 20.5% to a seasonally adjusted annualized rate of 800,000 units. Economists polled by Reuters had forecast a drop to 650,000 units. July sales were revised upward to 664,000 units from the 652,000 previously reported.

The stronger-than-expected housing market data could suggest an economy where the Fed would not need to cut rates, Goldman said.

Investors will have to wait until Friday for the Personal Consumption Expenditures (PCE) August report, which includes the Fed's preferred inflation measure.

Wall Street was eyeing its second straight day of declines on Wednesday after pushing to record highs on Monday.

At 2:54 p.m. (1854 GMT), the Dow Jones Industrial Average .DJI had fallen 138.88 points, or 0.30%, to 46,154.31, the S&P 500 .SPX fell 20.14 points, or 0.30%, to 6,636.80 and the Nasdaq Composite .IXIC fell 76.44 points, or 0.35%, to 22,497.04.

MSCI's gauge of stocks across the globe .MIWD00000PUS fell 3.22 points, or 0.33%, to 978.94.

Earlier, the pan-European STOXX 600 .STOXX index closed down 0.19%. In contrast, European defence stocks .SXPARO closed 1.5% higher after U.S. President Donald Trump said he believed Ukraine could retake all its land occupied by Russia, marking a sudden shift in rhetoric in Kyiv's favour.

Gold prices eased from the previous session's record highs as the U.S. dollar firmed while investors hunkered down for the upcoming economic data releases, seeking further cues on the Fed's policy path.

Spot gold XAU= fell 0.99% to $3,726.49 an ounce. U.S. gold futures GCc1 fell 0.36% to $3,767.10 an ounce.

In currencies, the U.S. dollar gained against the yen, the Swiss franc and the euro after Jerome Powell struck a cautious tone, while the New Zealand dollar eased following the appointment of a new central bank chief.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.68% to 97.89.

The euro EUR= was down 0.68% at $1.1735. The dollar strengthened 0.83% against the Japanese yen JPY= to 148.84. Against the Swiss franc CHF=, the dollar strengthened 0.57% to 0.796. The kiwi NZD= weakened 0.8% versus the greenback to $0.5809.

In government bond markets, U.S. Treasury yields inched higher, driven by an increase in corporate and government bond supply, while investors were still digesting Powell's comments.

The yield on benchmark U.S. 10-year notes US10YT=RR rose 3 basis points to 4.149%, from 4.118% late on Tuesday, while the 30-year bond US30YT=RR yield rose 2.8 basis points to 4.7655%.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.8 basis points to 3.598%.

Oil prices surged to a seven-week high and settled up more than 2%, as a surprise drop in U.S. weekly crude inventories added to a sense in the market of tightening supplies amid export issues in Iraq, Venezuela and Russia.

U.S. crude CLc1 settled up 2.49%, or $1.58, at $64.99 a barrel and Brent LCOc1 settled at $69.31 per barrel, up 2.48%, or $1.68, on the day.

In cryptocurrencies, bitcoin BTC= gained 1.48% to $113,691.14.