* Gold prices rise after nearly 2-pct drop overnight
* Chinese premiums climb on lower prices
(Adds trader comment, updates prices)
By A. Ananthalakshmi
SINGAPORE, Dec 23 Gold rose on Tuesday, moving
away from a three-week low hit in the previous session, as the
dollar and equities eased after recent rallies.
Spot gold had climbed 0.7 percent to $1,182.40 an
ounce by 0752 GMT. It tumbled nearly 2 percent in the previous
session, dropping to $1,170.17 an ounce - its lowest since Dec.
Liquidity was thin due to the upcoming Christmas holiday,
while Japanese markets were closed on Tuesday for a public
"Positioning still seems to be light in gold so we expect
the market to remain contained during the holiday period, but
big swings in other markets such as the dollar and crude will
exacerbate moves due to the light liquidity," said Alex
Thorndike, senior trader at MKS Group.
Traders were closely watching moves in the equity, forex and
oil markets for cues.
Rising equities and a stronger dollar dull demand for gold
as a safe-haven asset. Lower oil prices decrease its appeal as a
hedge against oil-led inflation.
Wall Street closed at historic highs on Monday, boosting
global equities. The dollar index, a measure of the
greenback's strength against a basket of major currencies, was
holding close to a nine-year peak.
A stronger greenback makes dollar-denominated gold more
expensive for holders of other currencies.
Equities and the dollar gave up some of those gains on
Tuesday on profit-taking.
Bullion found some support in the physical markets, where
top consumer China saw bargain hunters emerge after the price
drop on Monday.
Prices on the Shanghai Gold Exchange rose to a premium of up
to $5 an ounce over the global benchmark, compared with $2-$3 in
the previous session.
"While emerging market buying on dips is likely to moderate
further potential price declines, ongoing oil market weakness is
a significant weight on bullion and may very well cap rallies,"
HSBC analysts said in a report.
In central bank activity, data from the International
Monetary Fund data released on Tuesday showed that Russia raised
its gold reserves for an eighth month in a row in November,
while Ukraine reduced bullion holdings for a second straight
Significant buying and selling by central banks can
influence gold prices.
Data on U.S. GDP, durable goods orders and new homes sales,
along with GDP data from Britain and France will be eyed for
cues later in the session.
PRICES AT 0752 GMT
Metal Last Change Pct chg
Spot gold 1182.4 7.74 0.66
Spot silver 15.74 0.12 0.77
Spot platinum 1184.75 7.01 0.6
Spot palladium 810.9 2.92 0.36
Comex gold 1182.3 2.5 0.21
Comex silver 15.75 0.062 0.4
COMEX gold and silver contracts show the
most active months
(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)