* U.S. business activity growth slowed in August - IHS Markit * Caution over virus helping gold - analyst * Palladium extends gains, up nearly 3% (Recasts, updates prices) Aug 24 (Reuters) - Gold prices held steady on Tuesday above the $1,800 per ounce level, helped by speculation that a spike in coronavirus cases may prompt the U.S. Federal Reserve to defer its tapering of monetary stimulus. Spot gold was little changed at $1,804.30 per ounce by 1056 GMT, after hitting a near three-week high in the previous session. U.S. gold futures were steady at $1,806.90. The dollar, also considered a ‘safe haven’ asset, stabilised after falling about 0.6% on Monday, with traders looking ahead to this week’s Jackson Hole Federal Reserve symposium. “The dollar is now very much in the driving seat... and by extension, of course, Jackson Hole,” independent analyst Ross Norman said. The spread of the Delta coronavirus variant has raised doubts about economic growth, with investors anticipating that the U.S. central bank might delay tapering. Given that uncertainty, “there’s a degree of caution creeping in, and that’s been clearly supportive of gold”, Norman said. While gold tends to benefit from stimulus spending given its status as a hedge against inflation risks and currency weakness, it had been caught between mixed signals from Fed officials before the breakout on Monday. “The fact that gold again breached the $1,800 level says the market is still quite concerned about the Delta variant,” said OCBC Bank economist Howie Lee. Data showed U.S. business activity growth slowed in August, while Asia’s robust economic recovery from last year lost steam. Gold’s latest uptick also came despite outflows from exchange-traded funds, such as the SPDR Gold Trust. But physical demand from retail customers seems to be offsetting the gold ETF outflows, Norman said. Silver rose 0.2% to $23.70 per ounce, while platinum gained 0.5% to $1,017.79. Palladium was up 2.8% at $2,465.95 per ounce. Prices climbed 5.5% on Monday. (Reporting by Arundhati Sarkar and Brijesh Patel in Bengaluru; Editing by Mike Harrison and Jan Harvey) Our Standards: The Thomson Reuters Trust Principles.