* Trading volumes seen limited ahead of holidays
* Spot gold remains neutral in $1,121-$1,137 range
* Spot palladium down over 6 pct so far this week
(Updates prices, adds comment)
By Sethuraman N R
Dec 23 Gold edged up on Friday on a weaker
dollar, but the yellow metal was on track for a seventh straight
weekly decline amid expectations that the U.S. Federal Reserve
will opt for more interest rate hikes in 2017.
Spot gold edged up 0.2 percent to $1,131.36 an ounce
by 0639 GMT.
U.S. gold futures rose 0.2 percent to $1,133 per
New orders for U.S.-made capital goods rose more than
expected in November. Other data on Thursday showed that
third-quarter U.S. economic growth beat expectations.
But the number of Americans applying for unemployment aid
hit a six-month high last week and U.S. consumer spending
increased modestly in November.
"There is not much reaction (to the news) because the
pre-holiday liquidity is very tight," said Helen Lau, an analyst
at Argonaut Securities in Hong Kong.
"It is very difficult to gauge the short term direction,"
Lau said, adding that gold might move according to the dollar.
More consistent evidence of U.S. economic strength could
prompt the Fed to tighten credit again sooner than later. Higher
rates discourage buying of non-interest-paying bullion, which is
priced in dollars.
The dollar hovered below the 14-year high set earlier this
week. The dollar index, which measures the greenback
against a basket of currencies, was down 0.1 percent to 102.980.
"Low volatility may be contributing to gold's weakness,"
said HSBC analyst James Steel, adding that the heavy
drop in the gold exchange traded funds is weighing on the
Holdings of SPDR Gold, the world's largest gold-backed
exchange-traded fund, have fallen over 12 percent since
"Gold is on the defensive but we sense support in the market
between $1,120-1,100 and believe these levels will hold barring
a significant dollar rally."
Asian stocks stepped back in subdued trade on Friday as Wall
Street took a breather from its relentless rise since the U.S.
election, while the dollar hovered below the 14-year high set
earlier this week.
Spot gold remains neutral in a range of $1,121 to $1,137 per
ounce, and only an escape could indicate a direction, according
to Reuters technical analyst Wang Tao.
Silver was mostly flat at $15.82.
Platinum was steady at $903.49 and palladium
fell 0.2 percent to $653.35.
Platinum has lost over 2 percent, while palladium has
dropped over 6 percent so far this week.
"The declines in the platinum group metals are steep but we
do not see a clear fundamental reason for the drop and suspect
they were down in low volume," HSBC analyst Steel said.
HSBC lowered its platinum price forecast for 2017 and raised
(Reporting By Nallur Sethuraman in Bengaluru; Editing by
Richard Pullin, Michael Perry and Christian Schmollinger)