PRECIOUS-Gold prices wobble as risk sentiment improves

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* Spot gold may fall towards $1,264- analyst

* Silver hits 5-month low

* Palladium down 19% since scaling record peak in March (Updates prices, adds quote)

May 17 (Reuters) - Gold prices marked time on Friday, afterseeing its biggest one-day percentage loss in a month onThursday, on a firmer dollar and increased investor appetite forriskier assets due to strong U.S. data and corporate results.

Spot gold XAU= was mostly unchanged at $1,286.27 per ounceas of 0732 GMT.

U.S. gold futures GCcv1 were steady at $1,286.90 an ounce.

Spot gold fell 0.8% on Thursday, its biggest one-daypercentage decline in a month after risk sentiment improved.

"Markets are very much inclined towards the riskier assets.Investors are trying to price in breakthrough in (Sino-U.Strade) talks due to the conciliatory tone from both the camps,"said Benjamin Lu, an analyst with Singapore-based PhillipFutures.

Strong corporate earnings have also boosted equities and thedollar, pressuring gold, he said.

U.S. stock indexes extended gains on upbeat earnings as wellas robust economic data that underlined the strength of thedomestic economy. Meanwhile, the dollar index .DXY hit atwo-week high against a basket of currencies. .NUSD/

The U.S. housing data showed homebuilding increased morethan expected in April, while unemployment benefits fell morethan expected last week, pointing to sustained labour marketstrength that should underpin the economy. urn:newsml:reuters.com:*:nL2N22R1F7

The pullback in risk aversion lifted treasury yields. Therise in yields underpinned the U.S. dollar. MKTS/GLOB

A stronger dollar makes gold more expensive for holders ofnon-U.S. currency.

Early in the week, spot gold prices rose 1.1%, registeringtheir best one-day percentage gain in nearly three months afterChina announced that it would impose retaliatory tariffs on arange of U.S. goods. urn:newsml:reuters.com:*:nL2N22P0A6

Even though trade worries have taken a backseat, investors are still wary of possible tensions emanating from a U.S. bid toblock China'sHuawei TechnologiesHWT.UL from buying vitalAmerican technology. urn:newsml:reuters.com:*:nL2N22S0RC

"There is some risk-off sentiment in Asia with Huawei banfurther escalating U.S-China trade sentiment. Gold is gettingsome support around $1,285 levels, but the dollar strength islimiting the metal's upside," Margaret Yang Yan, a marketanalyst at CMC Markets said.

Meanwhile, Thursday's fall in gold prices have worsened thetechnical picture for the metal.

Spot gold may break a support at $1,283 per ounce, and falltowards the next support at $1,264, according to Reuterstechnical analyst Wang Tao. urn:newsml:reuters.com:*:nL4N22T123

Among other metals, silver XAG= was down 0.2% at $14.52and ounce, after hitting a low since Dec. 14, 2018 at $14.46 anounce.

Platinum XPT= dipped 0.3% to $826.90 per ounce, having hita two-month low at $820.50 earlier in the session.

Palladium XPD= was down 1.1% at $1,316.21 per ounce andslumped about 19% since the metal used in catalytic convertersin car exhaust systems scaled a record peak of $1,620.53 inMarch. (Reporting by Nallur Sethuraman in Bengaluru; editing byUttaresh.V) ((Sethuraman.NR@thomsonreuters.com; (Within U.S.1-651-848-5832, Outside U.S. +91 8067496031); Reuters Messaging:nallur.sethuraman.thomsonreuters.com@reuters.net))

This article appears in: Stocks , World Markets , Politics

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