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PRECIOUS-Gold heads to first weekly gain in 4 weeks after Fed rate hike

* Gold up 0.5 percent this week

* Dollar, U.S. yields lower after rate hike

* Low prices spur Asian demand

(Updates comment, prices; adds byline, NEW YORK dateline) NEW YORK/LONDON, Dec 15 (Reuters) - Gold prices clung to earlier gains and were poised for their first weekly gain in four weeks on Friday, withstanding pressure from strong equities markets on continued support from this week's interest rate rise

Spot gold was up 0.19 percent at $1,255.12 per ounce

recovered from Monday's five-month low of $1,235.92. The most

active U.S. gold futures for February delivery settled

up 0.03 percent, at $1,257.50 per ounce. Higher interest rates usually push gold lower because they raise bond yields, reducing the appeal of non-yielding bullion, and boost the dollar, making gold more expensive for holders of other currencies. But markets had priced in Wednesday's rise and the dollar and bond yields fell after the Fed kept its outlook for three rate rises next year unchanged and said proposed U.S. tax cuts would not significantly spur growth. U.S. inflation remained weak, which Chicago Fed President Charles Evans said on Friday undermined the case for rate rises.

The dollar recouped some losses as Republican senators worked to resolve disagreements on the tax reform. Major stock indexes hit record highs. "The rate hike was baked in, but I think more importantly there was this slight doubt in people's minds that the Fed might be more aggressive in 2018. What we got from them this week tells us that probably isn't the case," Bill ONeill, partner at Logic Advisors in Upper Saddle River, New Jersey. Also helping was a rise in demand in Asia as buyers took advantage of low prices. Societe Generale analyst Robin Bhar said gold's bounce would be short-lived because other asset classes including equities, industrial metals and even bitcoin appeared to offer better returns. Gold is up around 9 percent this year while global shares and industrial metals have gained some 20 percent and bitcoin 1,740 percent.

In other metals, palladium was down 1.19 percent at

$1,020.72, but still up for the week after hitting $1,038 an ounce on Thursday, the highest since early 2001. "The palladium metal supply remains tight and until this is alleviated we can expect the premium to remain," said Miguel Perez-Santalla, vice president of Heraeus Precious Metals in New York.

Silver was up 1.01 percent at $16.03 per ounce and

set for its first weekly gain in four weeks.

Platinum rose 1.28 percent at $889.75 per ounce,

marginally higher for the week.

(Additional reporting by Apeksha Nair in Bengaluru; Editing by Edmund Blair and James Dalgleish)