PRECIOUS-Gold down on dollar and weak oil, heads for third annual loss

* Crude oil resumes slide, down more than 2 percent
* Dollar index climbs to near 1-week high
* Platinum drops 3.6 percent to 2-week lows

(Updates prices)
By Clara Denina
LONDON, Dec 30 (Reuters) - Gold fell on Wednesday, as the
combination of a firm dollar and weak oil prices left the metal
on track for its third consecutive annual loss.
Bullion has lost 10 percent of its value this year, largely
on concerns that higher U.S. interest rates would hurt demand
for the non-yielding asset.
Spot gold XAU= dipped 0.8 percent to $1,060.10 an ounce by
2:38 p.m. EST (1938) GMT, while U.S. gold futures GCcv1
settled down $8.20 an ounce at $1,059.80. Trading volumes were
muted in the holiday-shortened week.
The rest of the precious metals complex also dropped, with
platinum XPT= down 2 percent at $869.51 an ounce after hitting
a two-week low of $850.50 an ounce, having fallen through a
technical support level around $860.
"Physical demand in gold continues to be relatively
aggressive in the Far East compared with October and November,
and on that basis gold should be much higher, but there seems to
be this pressure from the dollar, which continues to put a lid
on the price," MKS SA head of trading Afshin Nabavi said.
"It looks like support is at $1,045 and $1,050, and
resistance stands at $1,085/$1,095."
With little market-moving data due this week, bullion
traders will rely on cues from the currency and oil markets,
analysts said.
The dollar was up 0.05 percent against a basket of
currencies .DXY and was heading for a 10 percent yearly
increase, making gold more expensive for foreign currency
holders. FRX/
Following the U.S. Federal Reserve's move to raise interest
rates for the first time in nearly a decade this month and
indications that the central bank would resort to gradual
increases in 2016, the outlook for gold does not look bullish.
Gold typically follows oil as the metal is often seen as a
hedge against oil-led inflation.
Brent crude oil retreated towards 11-year lows on Wednesday
as Saudi Arabia's oil minister made it clear the kingdom had no
plans to scale back its output. ID:nL3N14J1OI
Investor interest in gold remained absent, with assets of
SPDR Gold Trust GLD , the top gold-backed exchange-traded fund,
still near a seven-year low. Speculative short positions on
COMEX gold contracts are close to an all-time high.
Silver XAG= fell 1percent to $13.81 an ounce, on track for
a 12 percent yearly fall, while palladium XPD= lost 2 percent
to $543.50 an ounce. The metal was heading for the first yearly
loss in four years, down nearly 30 percent.