* Gold remains good hedge against lot of mkt risks - trader
* Specs trim net short positions in gold in week to Dec. 4
By Sumita Layek
BENGALURU, Dec 11 (Reuters) - Gold prices edged higher on Tuesday,
supported by hopes that the U.S. Federal Reserve could pause its rate
hike cycle sooner than expected and as the dollar slipped after the
previous session's rally.
Spot gold was up 0.3 percent at $1,247.92 per ounce, as of 0825
GMT. It touched its highest in nearly five months at $1,250.55 in the
U.S. gold futures were 0.3 percent higher at $1,252.6 per ounce.
"Weakening U.S. dollar outlook and very dovish pivots from
the Fed, a lot of uncertainty boxed around equity markets... It can
still turn quite negative, so this is why gold remains a good hedge
against a lot of market risks," said Stephen Innes, APAC trading
head at OANDA in Singapore.
"I am very bullish on gold in this setup into 2019."
The dollar index , a measure of the greenback's strength versus
a group of six major peers, edged lower after rallying in the previous
session as a vote on Brexit deal was postponed.
"Gold is likely to be the best safe haven than the dollar at
the moment," said Hareesh V, head of commodity research at Geojit
Financial Services in Kochi, India, adding that some of the economic
events were likely to affect the interest rate hikes that could weigh
on the dollar in the coming month.
Investors are now focused on the U.S. Federal Reserve's Dec.
18-19 policy meeting for clues on future rate hikes.
The Fed's plans to continue raising interest rates next year were
met with more skepticism on Wall Street on Monday, with futures
traders betting on a pause and one major bank partially walking back a
"Markets still see an increase in December but even one
further hike in 2019 is now being questioned whereas two of them were
fully priced in just a month ago," said Ilya Spivak, a currency
strategist for DailyFX.
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion and weigh on the dollar.
"Technically, the break above $1,250 will be very
significant... $1,250 is a very key point and on the bottom it's
$1,240," OANDA's Innes said.
Meanwhile, hedge funds and money managers trimmed their net short
positions in Comex gold and silver contracts in the week to Dec. 4,
the U.S. Commodity Futures Trading Commission (CFTC) said on Monday.
Among other precious metals, spot silver was up 0.5 percent at
$14.59 per ounce, while palladium rose 0.9 percent to $1,229.00.
Platinum was down 0.7 percent at $780.10 per ounce. Prices had
slipped to their lowest since Sept. 10 at $773.50 in the previous
(Reporting by Sumita Layek and Eileen Soreng in Bengaluru; Editing by
((Sumita.Layek@thomsonreuters.com; Within U.S. +1 651 848 5832,
Outside U.S. +91 8067491638; Reuters Messaging: Sumita.Layek.email@example.com))