PRECIOUS-Gold holds near 3-week peak as Trump inquiry knocks risk appetite

* Spot gold may rise more to $1,546/oz - technicals
* Palladium touches record peak at $1,676.53/oz
* Dollar recovers after Tuesday's drop

(Adds graphics, updates prices)
By Brijesh Patel
Sept 25 (Reuters) - Gold held near a three-week peak on
Wednesday as an impeachment inquiry into U.S. President Donald
Trump raised political uncertainty in the world's largest
economy, triggering a broader sell-off in equity markets.
Deficit-hit palladium meanwhile continued its record run to
a new all-time high.
Spot gold XAU= was at $1,530.10 per ounce at 1127 GMT,
little changed from the previous day, when it hit its highest
since Sept. 5 at $1,535.60.
U.S. gold futures GCv1 eased 0.2% to $1,537.30.
Democrats in the U.S. House of Representatives on Tuesday
launched a formal impeachment inquiry into Trump, alleging he
sought foreign help to smear Democratic rival Joe Biden ahead of
next year's election. "Gold is holding on to the gains from yesterday because of
announcements which seem to have hit the dollar and risk
appetite," said OANDA senior market analyst Craig Erlam. "(That)
is almost perfect for gold."
"We're going to have a lot of commentary over the coming
days which is going to play in risk appetite," he added.
The impeachment threat increased the prospects of prolonged
political uncertainty, driving investors out of assets seen as
riskier, with world stocks falling to a two-week low. MKTS/GLOB
Gold is considered a safe store of value during times of
political and financial uncertainty.
The impeachment inquiry push and disappointing U.S. economic
data rattled Wall Street on Tuesday, with the S&P 500 .SPX
posting its biggest daily decline in a month. Meanwhile, the dollar .DXY rose, recovering overnight
losses and stemming bullion's advance. USD/
On the trade front, Trump delivered a stinging rebuke to
China's trade practices in a speech on Tuesday, saying he would
not accept a "bad deal" in U.S.-China negotiations. "In the short term, economic and geopolitical uncertainty is
likely to keep gold prices supported, and possibly even lift
them to $1,600/oz," OCBC analysts said in a note.
From a technical viewpoint, spot gold may rise to $1,546 per
ounce as it has cleared a resistance at $1,524, according to
Reuters technical analyst Wang Tao. Among other precious metals, palladium XPD= dipped 0.3% to
$1,668.30 an ounce, after hitting a record peak of $1,676.53
earlier in the session.
The metal has rallied more than 20%, or nearly $300, since
touching a near two-month low in early August, driven by a
sustained supply deficit for the autocatalyst metal.
Silver XAG= edged 0.1% lower to $18.56 an ounce, while
platinum XPT= gained 0.1% to $954.21.

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