PRECIOUS-Gold holds firm on struggling dollar, equity selloff

Published 2018-12-21, 04:25 a/m
© Reuters.  PRECIOUS-Gold holds firm on struggling dollar, equity selloff
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* Platinum on track for first weekly gain in 7

* Holdings in SPDR Gold Trust fell on Thursday

* GRAPHIC-2018 asset returns: http://tmsnrt.rs/2jvdmXl

By Karthika Suresh Namboothiri

BENGALURU, Dec 21 (Reuters) - Gold prices steadied on Friday, holding firm near a six-month high struck in the previous session, as the dollar remained under pressure due to a subdued outlook towards U.S. interest rates and the economy, and investors shunned risky assets.

Spot gold XAU= was little changed at $1,259.34 per ounce at 0915 GMT, after jumping more than 1 percent in the previous session. The precious metal hit a high of $1,266.4 on Thursday, a level last seen on June 26.

The bullion has gained about 1.7 percent so far this week.

U.S. gold futures GCv1 declined 0.3 percent to $1,263.7 per ounce on Friday.

"A depreciating dollar coupled with expectations of fewer rate hikes in 2019 remain the primary factors supporting spot gold prices," said Lukman Otunuga, a research analyst with FXTM.

"The U.S. Federal Reserve's failure to reassure investors that they understand the risks across global markets is seen fuelling appetite for safe-haven gold in the short- to medium-term."

The Fed's commitment on Wednesday to retain the core of its plan to tighten monetary policy, despite rising uncertainty about global economic growth, rattled stock markets and pressured the dollar, making the U.S. currency-denominated gold more appealing for non-U.S. investors. USD/

"With volatile equity markets accelerating the flight to safety, gold is likely to remain supported for the rest of 2018," FXTM's Otunuga said.

Global stocks continued their slide on Friday as the threat of a U.S. government shutdown and of further hikes in U.S. borrowing costs fanned investor unease over the economic outlook. MKTS/GLOB expect risk sentiment to remain on very wobbly conditions entering the new year," said Stephen Innes, APAC trading head at OANDA in Singapore.

The dollar's weakness against its Japanese peer JPY= has parked gold in "a perfect spot" for investors, Innes added.

Spot gold may fall into a range of $1,245-$1,253 per ounce, following its failure to break a resistance at $1,266, according to Reuters technical analyst Wang Tao. Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings fell 0.34 percent to 769.14 tonnes on Thursday. other precious metals, palladium XPD= rose 0.4 percent to $1,269.48 per ounce, but was up about 1.2 percent for the week in what would be its fourth consecutive weekly gain.

Silver XAG= fell 0.6 percent to $14.68 per ounce, but has gained about 0.7 percent so far in the week.

Platinum XPT= fell 0.4 percent to $790.49 per ounce, and was headed for a weekly gain for the first time in seven.

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