|Credit: See Below|
The top side has the logo of the Palestine Chess Federation, and the bottom side the Maccabiah's logo. The text reads, top, 'The Palestine Chess Federation', and bottom, 'The 2nd Maccabiah, Palestine'. (As usual, we translate the Hebrew term Eretz Israel -- 'Land of Israel' -- into 'Palestine', the equivalent English term used at the time).
As instances of public use of the Palestine Chess Federation's logo seem to be rather rare (see, for one such use, this post), this is certainly a significant find. Also, this medal, as well as the Zilbershats case noted in this previous post, strongly suggest that chess was an official field of competition in the Maccabiah. This was certainly what all chess books which mention the subject, as well as contemporary newspaper reports, say or imply.
However, prof. Ladany believes that this was never officially the case, and that his research has no mention of chess as officially being part of the 1935 Maccabiah. He believes "annexing" chess to the Maccabiah was one of the many cases (then as in the 1932 Maccabiah) of using the event as a formal excuse for immigration purposes, to allow as many Jews as possible to enter the country in the teeth of British restrictions on Jewish immigration.