PRECIOUS-Gold holds near five-month peak as dollar, stocks decline

Reuters

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 (Recasts, updates prices, adds comment)
    * Palladium falls over 3 pct after record high on Wednesday
    * Platinum near three-month lows
    * Markets await U.S. non-farm payrolls data due Friday

    By Swati Verma and Sethuraman N R
    BANGALURU, Dec 6 (Reuters) - Gold rose on Thursday to near a
five-month peak on a weaker dollar and on expectations the pace
of U.S. interest rate hikes will slow, with the bullion also
getting support from falling equities.
    Spot gold  XAU=  was up 0.2 percent at $1,239.44 per ounce
at 13:48 EST (1848 GMT), having earlier reached $1,244.32 per
ounce, its highest since July 17. U.S. gold futures  GCv1 
settled up $1, or 0.1 percent, at $1,243.60. 
    "The weaker dollar is keeping gold positive at the moment.
If you look at the other markets as well, there is a kind of
risk-off situation going on," said Phil Streible, senior
commodities strategist at RJO Futures in Chicago.
    The dollar fell about 0.4 percent as U.S. Treasury yields
tumbled. USD/ 
    Stock markets slumped globally for a third straight session
on Thursday as the arrest in Canada of a top executive of
Chinese tech giant Huawei  HWT.UL  for extradition to the United
States raised fears of a flare-up in trade tensions.  MKTS/GLOB 
    The interest rate futures implied traders see no more than
one rate increase from the Fed in 2019, compared with
expectations a month earlier for possibly two, according to CME
Group's FedWatch program.
    Fed policymakers are still widely expected to raise interest
rates at their Dec. 18-19 meeting, but the market focus is on
how many rate increases will follow in 2019.
    Traders' attention is now turning to Friday's U.S. non-farm
payrolls report, which is also likely to be on the U.S. central
bank's radar.  urn:newsml:reuters.com:*:nL1N1Y91Q8
    "If gold could hold above $1,235, this is definitely a very
good signal, while surpassing $1,243 would open space for
further recoveries," said ActivTrades chief analyst Carlo
Alberto De Casa.
    Meanwhile, palladium dropped after outshining the yellow
metal for the first time since 2002 on Wednesday.  urn:newsml:reuters.com:*:nL8N1YA2EX
    Spot palladium  XPD=  slid 3.3 percent to $1,202.05 per
ounce after rising to an all-time high of $1,263.56 in the
previous session.
    "It's just profit-taking. Lots of money has moved in there
so investors are checking out and taking some profits," said Rob
Lutts, chief investment officer at Cabot Wealth Management.
    Silver  XAG=  dipped 0.6 percent to $14.42 per ounce, while
platinum  XPT=  fell for a third session in a row, declining 1.5
percent to $788.30 per ounce. The precious metal earlier hit an
almost three-month low of $779.50.

 (Reporting by Nallur Sethuraman, Swati Verma and K. Sathya
Narayanan in Bengaluru; Editing by Steve Orlofsky)
 ((Swati.Verma@thomsonreuters.com; +1-651-848-5832, outside
N.America, +91-80-6749-6356/1298; Reuters Messaging:
swati.verma.thomsonreuters.com@reuters.net))

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