* Spot gold may test $1,357.54/oz - technicals
* Palladium slips below Monday's record high
* Silver off 3-mth top, platinum off 4-mth high
(Adds comment, updates prices) Jan 16 (Reuters) - Gold prices edged higher on Tuesday to hold just below a four-month high touched in the previous session, supported by a weaker U.S. dollar languishing near three-year lows.
Spot gold was up 0.1 percent at $1,341.28 an ounce by
0310 GMT, after touching its strongest since Sept. 8 at $1,344.44 on Monday.
U.S. gold futures rose 0.5 percent to $1,341 an
ounce. "Gold seems to be moving higher on account of rising inflationary expectations and a steep drop in the dollar," said INTL FCStone analyst Edward Meir. "We are not sure if gold could withstand the higher yield environment going into 2018, especially if the dollar eventually reverses course. In addition, we don't see the recent spike in U.S. inflation lasting."
The dollar index , which measures the greenback
against a basket of currencies, fell on Monday to its lowest since December, 2014 at 90.279. It was last down 0.5 percent at 90.488. The euro stood near a 3-year peak on rising expectations that the European Central Bank could pare its monetary stimulus.
ECB rate-setter Ardo Hansson on Monday said the central bank could end its bond purchase scheme in one go after September if the economy and inflation develop as expected. The dollar has weakened as markets grow increasingly confident that a global recovery would outpace U.S. growth and prompt other major central banks, led by the ECB, to unwind their easy money strategy faster than has been expected. U.S. markets were closed for a holiday on Monday. "With New York returning, we expect volatility to return with gold remaining a buy on dips," MKS PAMP Group trader Jason Cerisola said. Spot gold may revisit its Sept. 8, 2017 high of $1,357.54 per ounce, as suggested by a retracement analysis, Reuters technical analyst Wang Tao said.
Palladium marked a record-high of $1,138 an ounce on
Monday. It was last up 0.1 percent at $1,126.74 on Tuesday. The metal has seen a sustained rally from high demand in the auto industry amid a supply deficit, analysts said.
Spot silver was down 0.2 percent to $17.31 an ounce.
It hit a three-month high of $17.42 on Monday.
Platinum dropped 0.4 percent to $992.49, after
touching its strongest since Sept. 11 at $1,001.40 on Monday.
(Reporting by Nallur Sethuraman in Bengaluru; Editing by Joseph Radford and Richard Pullin)