PRECIOUS-Gold climbs to 3-month high, poised for best year since 2010

(Updates prices)
* Gold gains about 19%, silver up 17% for the year thus far
* Palladium climbs 51% so far - biggest precious metal
gainer
* Platinum on track for best year since 2009
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

By Sumita Layek
Dec 31 (Reuters) - Gold prices jumped to their highest in
more than three months on Tuesday on a weakening dollar, with
the metal on track for its best annual show in nearly a decade,
while palladium leapt towards its fourth straight yearly gain.
Spot gold XAU= hit its highest since Sept. 25 at $1,525.20
and was up 0.6% to $1,524.44 per ounce by 0727 GMT. U.S. gold
futures GCcv1 rose 0.6% to $1,527.60.
Bullion has gained nearly 19% in the year, its biggest since
2010, mainly driven by a tariff war between the United States
and China, which triggered monetary policy easing by major
central banks.
"One of the main drivers behind gold's gain is the weakening
in the dollar," said Margaret Yang Yan, a market analyst at CMC
Markets, adding prices also rose on year-end bargain-hunting.
The dollar .DXY slipped against a basket of rivals, making
gold cheaper for holders of other currencies. USD/
"However, the upside is kind of limited because quantitative
easing or rate-cutting cycle has come to an end for now and we
don't see a possibility of any rate cuts in 2020," Yan said.
The U.S. Federal Reserve cut interest rates three times this
year before taking a pause. Lower interest rates reduce the
opportunity cost of holding the non-yielding bullion.
On the trade front, a Phase 1 deal is likely to be signed
next week, White House trade adviser Peter Navarro said on
Monday. "With liquidity much reduced in Asia, there is some
potential for gold to spike higher on low volume with some risk
hedging added into the mix," said Jeffrey Halley, senior market
analyst, Asia Pacific at OANDA, in a note. "The next resistance
is at $1,535 an ounce."
Further supporting gold, Asian shares slipped as investors
locked in gains after a buoyant year of gains. MKTS/GLOB
Speculators raised their bullish positions in COMEX gold
contracts in the week to Dec. 24. Elsewhere, palladium XPD= rose 0.3% to $1,913.02 per
ounce. Plagued by sustained supply deficit, the auto-catalyst
metal extended gains into a fourth straight year.
Prices have jumped over 51% so far this year, the most since
2017, which would make palladium the biggest gainer among
precious metals for the year.
Palladium, used mainly in catalytic converters in vehicles,
rose to an all-time peak of $1,998.43 on Dec. 17.
Silver XAG= rose 1.1% to $18.10 and was poised to register
its best year since 2010, rising about 17%.
Platinum XPT= gained 1.4% to $971.09 and was set to gain
about 23% for the year, its best since 2009.