PRECIOUS-Gold races to 3-month peak on doubts over stocks rally

(Updates prices)
* Wall Street opens at record levels
* Dollar index gains, but stands near 6-month low
* Palladium jumps to 2-week high of $1,965.02/oz

By Karthika Suresh Namboothiri
Jan 2 (Reuters) - Gold prices on Thursday began the year
with a healthy start, boosted by doubts surrounding the strength
of Wall Street's rally, while platinum added 3% on industrial
demand.
Spot gold XAU= was up 0.6% at $1,525.57 per ounce as of
1:49 p.m. ET (1849 GMT), having notched a three-month high of
$1,531.20 earlier in the session.
U.S. gold futures GCcv1 settled 0.3% higher at $1,528.10
an ounce.
"Investors are coming back from the holidays and
repositioning their portfolios," said Jeffrey Christian,
managing partner of CPM Group, citing the rally in equities as
the main reason for diversification.
"The fact that stock markets are at record highs is
continuing to strengthen gold and silver. There is nervousness
about why the stock markets are as high as they are, given the
economical and political environment."
U.S. stocks kicked off the new year at record levels as
fresh stimulus from Beijing to prop up its slowing economy
lifted risk appetite. .N Gold prices were further boosted by uncertainties
surrounding the U.S.-China trade negotiations. U.S. President
Donald Trump said on Tuesday that a "phase-one" of the deal
would be signed on Jan. 15, though considerable confusion
remains about its details. The much-awaited trade deal between the world's two largest
economies was expected to have been inked by the end of 2019.
However, with merely the initial chunk of the deal placed on the
table for talks, investors remain apprehensive.
The dollar .DXY rose 0.5% in the session, but was trading
not far from a six-month low hit on Tuesday. USD/ Gold
benefits from a weaker dollar, in which the precious metal is
priced.
"Technically, the gold bulls have the overall near-term
technical advantage as an accelerating price uptrend is in place
on the daily chart," Kitco Metals senior analyst Jim Wyckoff
said in a note.
Spot gold may test a resistance at $1,531 per ounce, a
break above which could lead to a gain to $1,542, according to
Reuters technical analyst Wang Tao. TECH/C
Elsewhere, platinum XPT= jumped 3% earlier in the session
to $991.19 an ounce, its highest since Sept. 5. It was currently
up 0.7% at $969.29.
Palladium XPD= gained 0.7% to $1,952.92. Prices advanced
to $1,965.81 earlier in the session, their highest since Dec.
17.
"Palladium and platinum are showing strength because people
have backed away from fears of an imminent recession, or seeing
that even with weaker growth, we are still growing," CPM Group's
Christian said.
Silver XAG= climbed 0.9% to $17.98 an ounce.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>