* Palladium hits nine-year high of $787.25/oz
* Spot silver at three-week highs
* Coming up: U.S. weekly mortgage index; 1200 GMT
By Amanda Cooper
LONDON, Dec 29 (Reuters) - Gold steadied around two-week
highs above $1,400 an ounce on Wednesday, closing in on a tenth
consecutive yearly gain after another batch of U.S. data cast
doubt on the economic outlook and weakened the dollar.
Palladium hit fresh nine-year highs, driven by expectations
for robust demand next year, while silver hovered near
The latest U.S. data, which showed consumer confidence
unexpectedly worsening in December and a drop in prices of
single-family homes in October, was at odds with other signs
suggesting recovery was accelerating in the world's largest
Spot gold was a touch lower on the day at $1,403.22 an ounce
by 1115 GMT, after hitting a two-week high of $1,406.75 on
Tuesday. U.S. gold futures for February delivery were virtually
unchanged on the day at $1,404.20.
"There is no significant data out today, so it's all
relatively quiet and I think it will stay like that," said VTB
Capital analyst Andrey Kryuchenkov.
"We're going to probably trade off currencies, the dollar
index is still lower, that's supporting gold this morning."
Gold is on track for a near 30-percent gain this year,
fuelled by investors seeking an alternative to increasingly
volatile currencies, stocks and bonds, against a backdrop of an
uncertain U.S. economic outlook and Europe's debt crisis.
U.S. 10-year Treasury yields were largely steady after their
largest one-day rise in two weeks on Tuesday following a dismal
auction of five-year debt.
The dollar stabilised somewhat after the rise in Treasury
yields helped it recover from the previous day's losses. The
dollar index was down a touch, having fallen in three out of the
last five sessions.
"The U.S. economy outlook and monetary policy is a key
factor that influences gold prices. We've seen data alternate
between good and bad, showing that the economy is recovering,
but without a strong momentum yet," said Hou Xinqiang, an
analyst at Jinrui Futures based in China.
Hou expected gold prices to be rangebound with a strong
support level at $1,360 in the short term, before they rally in
the coming year.
Trading on the physical market was thin, with many market
players sidelined over the holiday period, dealers said.
Spot silver hit a three-week high of $30.39 an ounce, and
was trading at $30.32, led by a broad push higher across the
commodities complex, with copper at record highs and crude oil
steadying above $91 a barrel.
The gold-silver ratio, which reflects the number of ounces
of silver needed to buy one ounce of gold, fell to a new
four-year low of 46.6, compared with a 10-year average of 62.2.
Spot palladium reached $787.25, its highest since March
2001, before easing 0.4 percent on the day to $782.22.
Platinum was trading at $1,744.99, down 0.4 percent, but
still near seven-week highs.
Analysts have had high hopes on the platinum group metals,
citing robust growth in China's auto industry which is expected
to boost consumption of the PGM, especially palladium, used to
(Additional reporting by Rujun Shen in Singapore; Editing by
© 2022 Thomson/Reuters. All rights reserved.