* U.S. business activity growth slowed in August -IHS Markit * A recession bringing lasting support to gold unlikely -analyst * Palladium extends gains, up over 2% (Adds comment, updates prices) Aug 24 (Reuters) - Gold consolidated above $1,800 on Tuesday as some investors bet the recent surge in COVID-19 cases could steer the U.S. Federal Reserve away from announcing at its Jackson Hole symposium that it plans to taper its economic support. Spot gold was steady at $1,804.99 per ounce by 1:47 p.m. EDT (1747 GMT), having earlier hit its highest since Aug. 5. U.S. gold futures settled up 0.1% at $1,808.90. “The tenure of the marketplace has pivoted from thinking the Fed would lean hawkish at Jackson Hole symposium to one of the coronavirus keeping the Fed from doing anything as soon as they might have wanted to, and maybe even this year,” said Jim Wyckoff, senior analyst at Kitco Metals. Reflecting the economic impact of the virus was data showing U.S. business activity growth slowed in August. “What might be gold-market sensitive is the Fed might start to say inflation isn’t as transitory as thought and that could prompt them to tighten policy down the road, though the impact of the virus should override inflationary concerns for now.” Gold is considered as a hedge against inflation, while rising interest rates boost the opportunity cost of holding non-yielding gold. Fawad Razaqzada, market analyst with ThinkMarkets, also noted that $1,805-$1,810 was significant for gold since the bearish trend line converges with the 200-day average there. “We may see a potential drop, not least on profit-taking, to the next support around $1,795 and if gold takes out Monday’s low at $1776, that could trigger fresh technical selling.” Gold’s latest uptick came despite outflows from exchange-traded funds. “Even though short-term hiccups to economic activity are a risk to watch, a renewed recession, bringing lasting support to gold, still seems very unlikely,” said Carsten Menke, head of Next Generation Research, Julius Baer, in a note. Silver rose 0.9% to $23.86 per ounce, and platinum fell 0.1% to $1,012.5, while palladium was up 2.1% at $2,451.18. (Reporting by Nakul Iyer in Bengaluru; Editing by David Gregorio and Steve Orlofsky) Our Standards: The Thomson Reuters Trust Principles.