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PRECIOUS-Gold taps 9-1/2 month low as U.S. rate hike expectations loom

* Overall holdings in gold ETFs fall 5 pct since Nov 9
    * Market sees near 100 pct chance of December U.S. rate hike

 (Updates prices; adds comment, second byline, datelines)
    By Marcy Nicholson and Pratima Desai
    NEW YORK/LONDON, Nov 25 (Reuters) - Gold prices steadied
after falling to 9-1/2 month lows on Friday, heading for a third
consecutive weekly decline as investors sold on factors
including expectations of a U.S. interest rate rise.
    Spot gold was down 0.03 percent at $1,182.88 an ounce
by 2:15 p.m. EST (1915 GMT), after tapping $1,171.21, its lowest
since Feb. 8, as funds took profits on short positions. The
precious metal has fallen more than 7 percent so far in
November, leaving it on track for its largest monthly fall since
June 2013.
    U.S. gold futures settled down 0.9 percent at
$1,178.40, after dipping to their lowest since Feb. 5 at
$1,170.30.
    "Investors are still retreating from gold, though prices
falling below $1,200 has promoted some profit-taking," said
Commerzbank analyst Eugen Weinberg.
    "Gold is being driven by many factors including equity
markets, currency markets and expectations of higher U.S.
interest rates, which are going to be a huge burden."
    Equity markets have rallied since Donald Trump won the U.S.
presidential election.   
    "The rising dollar, yields and U.S. equity prices all
weighed on the appeal of the buck-denominated, non
interest-bearing and perceived safe-haven precious metal," said
Fawad Razaqzada, technical analyst for Forex.com.
    "In terms of the dollar, the slight weakness we have
observed at the end of this week could very well turn out to be
temporary even if a December rate rise may already be priced
in."
    Though the U.S. dollar fell against a basket of major
currencies on Friday, it was on track to close higher for the
third straight week after reaching the highest since March 2003.
 
    Markets are now pricing in a nearly 100 percent probability
that the U.S. Federal Reserve will raise rates at its December
meeting, according to CME FedWatch.
    That would further boost the dollar, making commodities more
expensive for holders of other currencies.
    Overall holdings of physical gold in exchange traded funds
(ETF) have fallen more than 5 percent to 54.135 million ounces
since Nov. 9, the day after the election. 
    "A further test of the downside cannot be ruled out just
yet, especially as ETF liquidations persist," UBS analysts said
in a note. 
    Traders say the U.S. monthly jobs report due on Dec. 2 will
be key to market sentiment. 
    Elsewhere, silver gained 1.4 percent at $16.48 an
ounce and palladium rose 1.65 percent at $741.
    Platinum fell 1.15 percent at $903, after reaching
its lowest since Feb. 8 at $899.50. 

 (Additional reporting by Apeksha Nair and Nallur Sethuraman in
Bengaluru; Editing by Alexander Smith and Mark Potter)
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