* Political uncertainty supports demand for bullion
* Spot gold may drop to $1,230 -technicals
* SPDR Gold holdings have risen 5.6 percent this month
* Palladium off over 3-week highs hit Thursday
(Adds comment, updates prices)
By Sethuraman N R
Feb 17 Gold held steady on Friday as the dollar
hovered near one-week lows, keeping the metal on track for a
third week of gains amid political uncertainties in the United
States and Europe.
Spot gold was flat at $1,238.29 per ounce at 0710
GMT, while U.S. gold futures were down 0.2 percent at
Gold is up 0.3 percent so far this week and has risen about
7.5 percent in 2017.
"Looks like people are waiting for the (next Federal
Reserve) meeting and don't want to take any chances as the U.S.
CPI numbers were really good and we see good chances for a rate
hike," said Ronald Leung, chief dealer at Lee Cheong Gold
Dealers in Hong Kong.
"We can see that people are opting for stocks rather than
A gauge of major world equity markets inched to a record for
a second straight day on Thursday, but took a breather on
"Dealers are extremely cautious about running the market
higher as the March Fed rate hike debate will likely play out
for the foreseeable future," said Stephen Innes, senior trader
Concern over U.S. President Donald Trump's policies, as well
as elections in the Netherlands, France and Germany this year,
fueled gold's rise to a peak of $1,244.67 on Feb. 8.
But the prospect of a stronger dollar and U.S. Treasury
yields after Fed Chair Janet Yellen said U.S. interest rates may
need to be raised in March dragged gold to $1,216.41 on
Wednesday, its lowest since Feb. 3.
The dollar index , which measures the greenback
against a basket of currencies, was at 100.540 on Friday, after
hitting a one-week low of 100.410 the day before.
Spot gold may drop to $1,230 per ounce as its correction
from the Feb. 8 high of $1,244.67 may extend, according to
Reuters technical analyst Wang Tao.
Holdings of SPDR Gold, the world's largest gold-backed
exchange-traded fund, have risen 5.6 percent so far this month,
the most since June 2016.
"We don't expect much in the way of market movements going
into Friday's session, but gold should nevertheless see
something of a bid heading into the weekend," said INTL FCStone
analyst Edward Meir.
Spot silver dipped 0.3 percent to $18.03 an ounce.
The metal hit its strongest since Nov.11 at $18.13 in the
Platinum edged down 0.1 percent to $1,010.80
Palladium fell 0.6 percent to $787.45. The metal,
used in emission-controlling catalytic converters for the
automotive industry, touched its best since Jan. 24 at $794.90
in the prior session. It has gained over 16 percent so far this
(Reporting by Nallur Sethuraman in Bengaluru; Editing by
Richard Pullin and Joseph Radford)