PRECIOUS-Gold at 5-week top as markets gear up for Trump administration

* Gold climbs as markets await Trump's arrival in office
    * Platinum at 2-month high, palladium at 5-week top

 (Updates prices; adds comment, second byline, NEW YORK
    By Marcy Nicholson and Jan Harvey
    NEW YORK/LONDON, Jan 9 (Reuters) - Gold rose to a five-week
high on Monday as markets reassessed the outlook for the U.S.
economy after Donald Trump is inaugurated as president later
this month, taking support from the falling dollar and lower
U.S. Treasury yields.
    Spot gold was up 0.9 percent at $1,183.60 an ounce by
3:17 p.m. EST (2017 GMT) after touching $1,185.80, the highest
since Dec. 5. U.S. gold futures for February delivery
settled up 1 percent at $1,184.90.
    The metal posted its biggest weekly increase in two months
last week.
    This came after it slid more than 12 percent in the last
quarter as Trump's election victory boosted expectations that
his tax and spending policies would boost the dollar and
inflation, prompting more U.S. rate increases.
    "A slight pullback in yields and a tiny dip in the dollar
and weaker equities are enough to support gold, which is
starting to benefit from greater stability in emerging markets,"
said James Steel, chief metals analyst for HSBC Securities in
New York.
    Strong outflows from gold-backed exchange-traded funds have
also lessened of late, while seasonal buying in the big Asian
gold markets, where India is deep into wedding season and China
is approaching the Lunar New Year, has been strong. 
    "There is an element of people taking a step back from
expectations that were formed shortly after the U.S. elections,"
UBS analyst Joni Teves said. 
    "People are now paring back those expectations until we get
strong evidence of an acceleration in U.S. growth, or further
guidance from the new administration on what their plans are,
and whether they will be able to deliver anything close to what
people had been pricing in."
    Hedge funds and money managers cut their net long position
in COMEX gold contracts for the eighth straight week in the week
to Jan. 3, data showed late on Friday. 
    On Monday, Boston Federal Reserve President Eric Rosengren
called for the U.S. central bank to step up its pace of interest
rate increases, while Atlanta Fed President Dennis Lockhart said
the possibility of a fiscal boost under Trump has shifted
economic risks to the upside.  
    Gold is highly sensitive to rising U.S. interest rates,
which increase the opportunity cost of holding non-yielding
bullion while boosting the dollar, in which it is priced.
    Platinum and palladium, precious metals that also have
industrial uses as autocatalysts, extended their rallies to new
    Spot platinum rose as much as 1.6 percent to $981.90
an ounce, a two-month high and near the 200-day moving average.
Palladium rose 1.6 percent to a five-week high at
    Silver was up 0.8 percent at $16.61.

 (Additional reporting by Swati Verma and Nallur Sethuraman in
Bengaluru; Editing by David Goodman/Ruth Pitchford)