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PRECIOUS-Gold struggles for direction as dollar firms, equities dip


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

* Silver hits 5-month low

* Palladium down 19% from record peak in March

By Brijesh Patel

May 17 (Reuters) - Gold price were mostly unchanged onFriday after a steep fall in the previous session, with gainscurbed by a firmer dollar and a pullback in global equities onU.S.-China trade tensions offering support.

Spot gold XAU= was steady at $1,285.67 per ounce as of1158 GMT.

U.S. gold futures GCcv1 were little changed at $1,285.80an ounce.

Spot gold fell 0.8% on Thursday, its biggest one-daypercentage decline since April, as investors became a littlemore receptive to taking on risk following strong economic datafrom the United States. urn:newsml:reuters.com:*:nL2N22R1F7

"On one end, gold has support from prevailing uncertaintiesin the financial markets relating to the trade talks andconcerns over growth outlook. At the same time, the dollar isexpected to stay strong for at least the next two weeks," saidJulius Baer analyst Carsten Menke.

"Gold is expected to be rangebound."

The dollar index .DXY rose, holding near a two-week highagainst a basket of currencies, making gold more expensive forholders of other currencies. USD/

Meanwhile, world stocks pulled back after tough words ontrade from China. MKTS/GLOB

The Communist Party's People'sDaily used a front pagecommentary to evoke the patriotic spirit of past wars, sayingthe trade war would never bring China down. urn:newsml:reuters.com:*:nL4N22T0XY

A U.S. move to block China'sHuawei TechnologiesHWT.UL from buying vital American technology further ratcheted uptensions over trade. urn:newsml:reuters.com:*:nL2N22S0RC

Meanwhile, Thursday's sharp fall has dented the technicalpicture for the metal.

"Bullion prices had broken the bearish trendline that hadmarked the last few months," Carlo Alberto De Casa, chiefanalyst with ActivTrades, wrote in a note.

"A clear recovery to the $1,300 level, and prices holdingabove this psychological threshold, would confirm the supportivescenario seen in the last two weeks, while a fall below $1,280would be seen as a negative element."

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 0.5% at $14.49 anounce, after hitting its lowest since Dec. 7 at $14.42 an ounce.Silver is also on track for a decline of about 2% for the week.

Platinum XPT= dipped 0.7% to $823.95 per ounce, having hita two-month low at $818.50 earlier in the session.

Palladium XPD= slipped 0.7% to $1,320.91 an ounce. It has slumped about 19% since the metal used in catalytic convertersin car exhaust systems hit a record high of $1,620.53 in March.

Both platinum and palladium are set to record weekly falls,with platinum on course for its biggest such drop in 10 weeks. (Reporting by Brijesh Patel in Bengaluru; Editing by MarkPotter) ((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 8485832, Outside U.S. +91 8067493865; Reuters Messaging:Brijesh.Patel1.thomsonreuters.com@reuters.net))






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