Gold hits highest since Dec. 4 record peak
Markets bet on 87 chance of Fed rate cut in March
Platinum hits highest level since June

Dec 28 Reuters Gold prices steadied on Thursday, after hitting a more than threeweek high earlier, as an uptick in U.S. bond yields undermined the support from expectations of rate cuts by the Federal Reserve early next year.

Spot gold lost 0.2 to 2,073.32 per ounce by 1212 p.m. ET 1712 GMT, after rising as high as 2,088.29 earlier, the most since Dec. 4, when bullion hit its alltime peak.

U.S. gold futures were down 0.5 to 2,083.70.

The reason prices have gone back near the horizon and rallied again towards the end of the year is all about interest rate expectations and a weaker dollar, said Chris Gaffney, president of world markets at EverBank.

The dollar index came off a fivemonth low and was heading for a yearly decline. Benchmark 10year bond yields picked up, but were also close to their lowest levels since July.

The number of Americans filing initial claims for unemployment benefits rose last week, indicating the labor market continues to cool in the year39;s fourth quarter.

Investors are betting on an 88 chance of the Fed cutting rates in March, according to the CME FedWatch tool.

Lower interest rates decrease the opportunity cost of holding nonyielding bullion.

We look for higher gold prices over the next 12 months, with weaker economic data and lower inflation in the U.S. forcing the Fed to cut rates, UBS analyst…