December 27, 2018 / 5:51 PM / 6 months ago

PRECIOUS-Gold rises as sliding stocks boost safe-haven demand

(Updates prices, adds comment)

* SPDR Gold holdings see best one-day surge in over 2 years

* Global equity rally runs out of steam

* Silver hits over 4-month peak

* GRAPHIC-2018 asset returns:

By Sethuraman N R

BENGALURU, Dec 27 (Reuters) - Gold prices rose on Thursday, helped by a weaker dollar and as a relief recovery in stock markets fizzled out, driving investors toward the safe-haven metal.

Spot gold was 0.8 percent higher at $1,276.76 per ounce at 12:33 p.m. EST (1733 GMT), after hitting $1,279.06 in the previous session, its highest since June 19.

U.S. gold futures rose 0.5 percent to $1,279.30 per ounce.

"The weaker dollar index is supporting the buying interest in gold and the U.S. stock indexes have pulled back significantly, which has also helped," said Jim Wyckoff, senior analyst at Kitco Metals.

"Also, the technical pasture of the gold market has become significantly bullish on a near-term basis, which is inviting some chart-based buying too."

A global equity rally fueled by a dramatic surge on Wall Street ran out of steam on Thursday, after a fall in Chinese industrial profits again showed the pressures on the global economy. U.S. stocks fell sharply on Thursday.

The dollar index, a gauge of the greenback's value against six major peers, fell 0.4 percent on Thursday, making gold cheaper for buyers of other currencies.

The partial U.S. government shutdown, which is widely expected to continue, was also supporting gold, analysts said.

"A slowing world economy might bring in some safe-haven demand. But, any reduction in world economic growth will also reduce consumer demand for gold in countries like China and India," Wyckoff said.

Investor confidence in bullion was reflected in a surge in the holdings of SPDR Gold, the largest exchange traded fund. SPDR holdings rose 2.1 percent on Wednesday, the best one-day percentage gain since July 2016.

"There has been an extensive surge in the gold exchange traded fund holdings and there is absolutely no shortage of momentum there. Investors are just preparing themselves by buying gold as there are several uncertainties heading into 2019," said Naeem Aslam, chief market analyst at Think Markets UK.

SPDR holdings, at their highest since August, have risen about 8 percent since touching more than 2-1/2-year lows in October.

Among other metals, silver was up 1.5 percent at $15.23 per ounce, after hitting its highest level since mid-August at $15.27.

Platinum fell 0.3 percent to $792.50 per ounce, while palladium rose 0.3 percent to $1,258. (Reporting by Nallur Sethuraman in Bengaluru; Editing by Steve Orlofsky and Diane Craft)

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