PRECIOUS-Gold little changed as U.S. tariff deadline approaches

(Updates prices)
* Markets eye UK election and ECB policy meeting
* U.S. dollar falls to lowest since early August
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

By K. Sathya Narayanan
Dec 12 (Reuters) - Gold prices were little changed on
Thursday as investors awaited threatened new tariffs on Chinese
goods this weekend while supply fears kept palladium on its
record run.
Spot gold XAU= slipped 0.1% to $1,473.23 an ounce at 0808
GMT. U.S. gold futures GCcv1 were up 0.2% at $1,477.50.
"The key issue for many markets in the near-term is the
trade negotiations between China and the U.S. Both Beijing and
Washington have indicated the worst-case scenario is the tariffs
would be delayed," said Michael McCarthy, chief market
strategist at CMC Markets.
"If we saw tariffs introduced on Sunday, that would be a
real positive for gold."
Gold is often considered a safe-haven investment during
times of political and financial uncertainty.
U.S. President Donald Trump is expected to meet top advisers
on Thursday about the tariffs and their Dec. 15 introduction on
nearly $160 billion of Chinese consumer goods, three sources
familiar with the plans said. In the previous session, bullion rose as much as 1% to its
highest since Dec. 5 after the U.S. central bank kept benchmark
interest rates unchanged and signalled that borrowing costs will
not change any time soon. Higher U.S. interest rates weigh on non-yielding bullion by
increasing its opportunity cost while also supporting the
dollar, in which gold is priced.
The U.S. dollar index .DXY fell to its lowest since early
August after the Fed dashed hopes of further interest rate
increases.
"With the Fed possibly expanding the balance sheet again in
2020 ... gold should be a regular feature in one's asset
allocation during periods of market uncertainty, especially when
interest rates are low," AxiTrader market strategist Stephen
Innes said in a note.
Investors were also focused on Thursday's UK election, which
could pave the way for Britain's departure from the European
Union, and Christine Lagarde's first meeting of the European
Central Bank later in the day. Elsewhere, palladium XPD= was up 0.3% at $1,915.84 an
ounce. Plagued by a supply deficit, the autocatalyst metal
registered a record high of $1,921 earlier in the session.
The metal surpassed $1,900 for the first time on Tuesday as
mines across South Africa shut down after flash flooding
triggered the most severe power blackouts in more than a decade,
threatening a key export sector. Platinum XPT= slipped 0.1% to $938.36 while silver XAG=
was steady at $16.85.