* Palladium hits nine-year high of $787.25/oz
* Spot silver at three-week highs
* Coming up: U.S. weekly mortgage index; 1200 GMT
By Amanda Cooper
LONDON, Dec 29 (Reuters) - Gold steadied around two-week
highs above $1,400 an ounce on Wednesday, closing in on a tenth
consecutive yearly gain after another batch of U.S. data cast
doubt on the economic outlook and weakened the dollar.
Palladium hit fresh nine-year highs, driven by expectations
for robust demand next year, while silver hovered near
three-week highs.
The latest U.S. data, which showed consumer confidence
unexpectedly worsening in December and a drop in prices of
single-family homes in October, was at odds with other signs
suggesting recovery was accelerating in the world's largest
economy. []
Spot gold <XAU=> was flat at $1,404.55 an ounce by 0950 GMT,
after hitting a two-week high of $1,406.75 in the previous
session. U.S. gold futures for February delivery <GCG1> were
unchanged at $1,405.40.
"There is no significant data out today, so it's all
relatively quiet and I think it will stay like that," said VTB
Capital analyst Andrey Kryuchenkov.
"We're going to probably trade off currencies, the dollar
index is still lower, that's supporting gold this morning."
Gold is on track for a near 30-percent gain this year,
fuelled by investors seeking an alternative to increasingly
volatile currencies, stocks and bonds, against a backdrop of an
uncertain U.S. economic outlook and Europe's debt crisis.
U.S. 10-year Treasury yields <US10YT=RR> were largely steady
after their largest one-day rise in two weeks on Tuesday
following a dismal auction of five-year debt. []
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DOLLAR STEADIES
The dollar stabilised somewhat after the rise in Treasury
yields helped it recover from the previous day's losses. The
dollar index <.DXY> was down a touch, having fallen in three out
of the last five sessions. []
"The U.S. economy outlook and monetary policy is a key
factor that influences gold prices. We've seen data alternate
between good and bad, showing that the economy is recovering,
but without a strong momentum yet," said Hou Xinqiang, an
analyst at Jinrui Futures based in China.
Hou expected gold prices to be rangebound with a strong
support level at $1,360 in the short term, before they rally in
the coming year.
Trading on the physical market was thin, with many market
players sidelined over the holiday period, dealers said.
Spot silver <XAG=> hit a three-week high of $30.39 an ounce,
and was trading at $30.33, led by a broad push higher across the
commodities complex, with copper <CMCU3> at record highs and
crude oil steadying above $91 a barrel. [] []
The gold-silver ratio, which reflects the number of ounces
of silver needed to buy one ounce of gold, fell to a new
four-year low of 46.6, compared with a 10-year average of 62.2.
Spot palladium <XPD=> reached $787.25, its highest since
March 2001, before easing 0.2 percent on the day to $783.00.
Platinum <XPT=> was trading at $1,750.74, down 0.1 percent,
but still near seven-week highs.
Analysts have had high hopes on the platinum group metals,
citing robust growth in China's auto industry which is expected
to boost consumption of the PGM, especially palladium, used to
produce autocatalyst.[][]
China has said it will end tax incentives for small cars on
Jan. 1, a long-anticipated move that would apply the brakes to
the runaway expansion of the world's largest auto market, but
shares of automakers were unfazed by the announcement,
suggesting continuous robust growth prospects for the industry.
[][]
(Additional reporting by Rujun Shen in Singapore; Editing by
Alison Birrane)
