PRECIOUS-Gold set for third weekly gain as traders eye U.S. fiscal stimulus

(Adds comments, updates prices)
* Break above $1,892/oz could see more upside in gold -
analyst
* Palladium set for first weekly gain in three
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

By Nakul Iyer
Dec 18 (Reuters) - Gold prices retreated on Friday as the
dollar rebounded, but were still on track for a third straight
weekly gain after a recent rally driven by progress on a U.S.
stimulus deal.
Spot gold XAU= dipped 0.3% to $1,880.46 per ounce by 0724
GMT. For the week, it was up 2.3%. U.S. gold futures GCv1 fell
0.2% to $1,886.30 per ounce.
"The U.S fiscal stimulus is more or less priced in...so
traders are trying to lock in profit before the weekend," said
Margaret Yang, a strategist at DailyFX.
U.S. Congressional lawmakers scrambled to pass a coronavirus
aid package on Thursday with both parties saying that failure to
reach an agreement was no longer an option. While a stimulus deal could spur gold prices higher, a more
sustained ascent would require signs of a significant pick-up in
inflationary pressures, said FXTM market analyst Han Tan.
The U.S. dollar rose 0.1%, just above a more than two-year
trough, dimming gold's appeal to other currency holders. USD/
A break above the $1,892 area with support from a dovish U.S
Federal Reserve and a weaker dollar could signal further upside
ahead with resistance at $1,910, Yang said.
Analysts also said gold would find support from the Fed's
promise to continue its bond-buying programme until
"substantial further progress" is seen in restoring full
employment and hitting its 2% inflation target. [nL1N2IV1EW
"Given the rising inflation expectations, weakening dollar
and lofty valuations in some risky assets, demand for safe-haven
inflation hedges should remain supported next year, continuing
to push gold towards our $2,300/toz target," Goldman Sachs said
in a note.
Potentially escalating geo-political tensions, the United
States is set to add dozens of Chinese companies to a trade
blacklist on Friday, sources said.
Silver XAG= slipped 1.4% to $25.70 an ounce, Platinum
XPT= fell 0.7% to $1,036.60 and palladium XPD= eased 0.1% to
$2,337.61 but was up 0.7% for the week.