PRECIOUS-Gold prices wobble as risk sentiment improves

* Spot gold may fall towards $1,264- analyst
* Silver hits 5-month low
* Palladium down 19% since scaling record peak in March

(Updates prices, adds quote)
By Sethuraman N R
May 17 (Reuters) - Gold prices marked time on Friday, after
seeing its biggest one-day percentage loss in a month on
Thursday, on a firmer dollar and increased investor appetite for
riskier assets due to strong U.S. data and corporate results.
Spot gold XAU= was mostly unchanged at $1,286.27 per ounce
as of 0732 GMT.
U.S. gold futures GCcv1 were steady at $1,286.90 an ounce.
Spot gold fell 0.8% on Thursday, its biggest one-day
percentage decline in a month after risk sentiment improved.
"Markets are very much inclined towards the riskier assets.
Investors are trying to price in breakthrough in (Sino-U.S
trade) talks due to the conciliatory tone from both the camps,"
said Benjamin Lu, an analyst with Singapore-based Phillip
Futures.
Strong corporate earnings have also boosted equities and the
dollar, pressuring gold, he said.
U.S. stock indexes extended gains on upbeat earnings as well
as robust economic data that underlined the strength of the
domestic economy. Meanwhile, the dollar index .DXY hit a
two-week high against a basket of currencies. .N USD/
The U.S. housing data showed homebuilding increased more
than expected in April, while unemployment benefits fell more
than expected last week, pointing to sustained labour market
strength that should underpin the economy. The pullback in risk aversion lifted treasury yields. The
rise in yields underpinned the U.S. dollar. MKTS/GLOB
A stronger dollar makes gold more expensive for holders of
non-U.S. currency.
Early in the week, spot gold prices rose 1.1%, registering
their best one-day percentage gain in nearly three months after
China announced that it would impose retaliatory tariffs on a
range of U.S. goods. Even though trade worries have taken a backseat, investors
are still wary of possible tensions emanating from a U.S. bid to
block China's Huawei Technologies HWT.UL from buying vital
American technology. "There is some risk-off sentiment in Asia with Huawei ban
further escalating U.S-China trade sentiment. Gold is getting
some support around $1,285 levels, but the dollar strength is
limiting the metal's upside," Margaret Yang Yan, a market
analyst at CMC Markets said.
Meanwhile, Thursday's fall in gold prices have worsened the
technical picture for the metal.
Spot gold may break a support at $1,283 per ounce, and fall
towards the next support at $1,264, according to Reuters
technical analyst Wang Tao. Among other metals, silver XAG= was down 0.2% at $14.52
and ounce, after hitting a low since Dec. 14, 2018 at $14.46 an
ounce.
Platinum XPT= dipped 0.3% to $826.90 per ounce, having hit
a two-month low at $820.50 earlier in the session.
Palladium XPD= was down 1.1% at $1,316.21 per ounce and
slumped about 19% since the metal used in catalytic converters
in car exhaust systems scaled a record peak of $1,620.53 in
March.