* Palladium hits all-time high of $1,269.25/oz
* Silver hits 6-week peak
* Markets await Dec. 18-19 FOMC meeting
* GRAPHIC-2018 asset returns:
By Swati Verma
Dec 13 (Reuters) - Gold eased to its lowest level in nearly one
week on Thursday as the dollar rose and investors latched on to gains
in global stocks, while palladium touched record highs on expectations
of higher demand for the auto-catalyst metal.
Spot gold fell 0.3 percent to $1,242.60 per ounce at 2:21 p.m.
EST (1921 GMT), while U.S. gold futures settled down $2.60, or 0.2
percent, at $1,247.40.
The dollar gained against a basket of major currencies, helped by
a dip in the euro after the European Central Bank reduced growth and
inflation projections for next year and said the balance of risk was
tilted toward the downside.
"It looks like ECB President Mario Draghi was a little more
dovish than expected, so we are seeing the euro currency back off and
the dollar strengthening, and this is weighing on gold prices,"
said Phil Streible, senior commodities strategist at RJO Futures in Chicago.
Also weighing on bullion was an improved sentiment for risk, with
global stock markets receiving a boost on signs of easing U.S.-China
"With equities rebounding this week, gold has fallen slightly
out of favor as traders unwound their safe-haven bets," said
Fawad Razaqzada, an analyst with Forex.com.
Markets would now be turning their attention to the Federal Open
Market Committee (FOMC) meeting on Dec. 18-19, with the focus on the
future path of interest rate hikes in 2019.
"If the Fed adopts a more dovish stance, we should see the
dollar quickly retreat and that should give gold an opportunity to
rally," Streible said.
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion and weigh on the dollar, making it cheaper for
holders of other currencies.
"Gold's recent breakout above the $1,240 resistance means the
path of least resistance is still to the upside and it should get a
lift if the dollar were to fall on the back of a dovish Fed,"
Forex.com's Razaqzada said.
Among other precious metals, spot palladium was down 0.7
percent at $1,251.99 per ounce, having touched a record high of
$1,269.25 earlier in the session.
"Palladium has got a very firm upward trend with good
fundamentals behind it. There is a lot of demand for palladium right
now and it should continue to move up on a favorable supply and demand
structure," RJO Futures' Streible said.
Silver was steady at $14.74 per ounce, having hit $14.81
earlier, its highest price since Nov. 2. Platinum fell 0.5 percent
to $795.30, after rising to a more than one-week peak earlier.
GRAPHIC-2018 asset returns
(Reporting by Swati Verma and Nallur Sethuraman in Bengaluru Editing
by Jonathan Oatis and Matthew Lewis)
((Swati.Verma@thomsonreuters.com; within U.S. +1 651 848 5832,
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