* Spot gold hits highest since Dec. 14
* Gold set for 9 pct gain in 2016
* All precious metals on course to end year up
* Palladium biggest gainer for the year
(Adds comment, updates prices)
By Swati Verma
BENGALURU, Dec 30 Gold was set to close out 2016
up more than 9 percent for its first annual gain in four years,
edging higher in the final trading session of the year on Friday
on the back of a weaker dollar.
Spot gold was up 0.2 percent at $1,160.42 an ounce by
0639 GMT, having earlier hit a more than two-week high of
$1,163.14 an ounce. Gold is up about 2.5 percent for the week
and poised to register its best weekly gain since early June.
"The dollar is retreating and that gave some support to
gold, amid some light buying in a thin market," said Ronald
Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong,
adding that the focus will now be on the impact of U.S.
President-elect Donald Trump's policies.
Gold has gained more than 9 percent so far this year despite
a steep fall in November, following three successive years of
"Gold made robust gains as demand surged during the periods
of economic and political uncertainty until the third quarter,"
said Mihir Kapadia, CEO of London-based Sun Global Investments
However, the safe haven asset is down nearly one percent in
December, and about 12 percent this quarter.
"The decline experienced by the metal during December is
largely due to the market tide favouring the U.S. economy which
hopes for infrastructure and spending boost under a Trump
administration, which has cemented expectations of higher
interest rates and higher stock prices in 2017," Kapadia said.
U.S. gold futures rose 0.3 percent to $1,161.30 per
"Some of the previous headwinds that have pushed gold lower
are now fading; among bearish items now no longer on the list
include a stronger dollar, rising U.S. rates and buoyant equity
markets," INTL FCStone analyst Edward Meir said in a note.
The market could witness a countercyclical bounce that may
carry on for a few more sessions, Meir added.
The dollar index, which measures the greenback
against a basket of currencies, fell 0.3 percent to 102.330.
Other precious metals were also set to end the year in
positive territory. Silver was up 0.3 percent at $16.19,
on track to end the year up about 17 percent.
Platinum gained 0.4 percent to $901, heading for
yearly rise of just over over one percent, its first annual gain
in four years.
Palladium edged 0.2 percent lower to $670.40, but was
the best performer among precious metals for 2016, up over 19
(Reporting by Swati Verma in Bengaluru; Editing by Michael
Perry and Richard Pullin)