Golden year for precious metals as 2019 sees glistening run

* Palladium extends gains into the fourth straight year

* Platinum on track for best year since 2009

* Gold set for biggest yearly gain since 2010

* Bullion to continue its bullish trend into 2020

* Graphic:

Dec 31 (Reuters) - Gold prices are set for their strongest annual increase since 2010, as worries over global economic health triggered a surge of interest in precious metals, while palladium soared more than 50% to record highs thanks to supply shortages.

Silver and platinum, which like gold are often seen as safe investments in uncertain times, also saw their largest annual gains in several years.

Many analysts say prices are likely to rise further in 2020, with shaky growth and global stock markets potentially looking unsustainable at record highs.

Central banks are also buying more gold and have flipped from tightening to loosening monetary policy, pushing interest rates and bond yields down and making non-yielding precious metals more attractive to investors.

“An environment of low rates, persistent macro uncertainty, and elevated equities makes a case for holding gold as a hedge. This view could likely drive demand for gold higher into 2020 and lend support to the current medium-term uptrend,” said Stephen Innes, a market strategist at AxiTrader.

While the United States and China cooled their trade war earlier this month, several issues remain unresolved and gold should perform well if dollar weakness plays out in 2020, he added.

Spot gold is up more than 18% in 2019 as of 1837 GMT and at $1,519.41 an ounce is pushing back towards a six-year high of $1,557 reached in early September. Holdings of gold in exchange traded funds (ETFs) also rose by around 14% this year.

Spot silver, rising in gold’s wake, is up about 15% in 2019 at $17.85 an ounce, its strongest performance since 2016.

Platinum at $962.50 an ounce was 21.6% higher this year, its biggest rise since 2009.

But palladium continued to stand out, soaring more than $700 an ounce this year in its fourth consecutive annual gain. It touched a record high of $1,998.43 an ounce on Dec. 17 and on Tuesday cost $1,938.

The metal is mainly used in car exhaust systems to neutralise emissions, and stricter environmental regulations are adding to demand.

Since palladium is produced as a by-product of nickel and platinum mining, supply has been unable to keep up, with further shortfalls expected in the early 2020s.

“The market has been in a structural deficit for a few years now and that’s expected to persist,” said Ryan McKay, a commodity strategist at TD Securities.

“We saw deficit this year, even though the auto market has been in terrible shape. On top of that we have increased environmental regulations globally. That contributes to increased PGM loadings in the auto-catalysts.”

Reporting by Swati Verma and Karthika Suresh Namboothiri in Bengaluru; Editing by Veronica Brown and Giles Elgood