PRECIOUS-Gold holds steady as rising US rate-cut bets offset dollar strength

Nov 25 (Reuters) - Gold prices held steady on Tuesday after rising nearly 2% in the previous session, as increasing prospects of a U.S. rate cut in December countered a firm dollar.

FUNDAMENTALS

Spot gold XAU= was down 0.2% at $4,132.20 per ounce, as of 0107 GMT. Bullion rose 1.8% on Monday to $4,139.80, its highest since November 14.

U.S. gold futures GCcv1 for December delivery edged 0.7% higher to $4,049.50 per ounce.

The dollar .DXY held firm near six-month highs hit last week, making greenback-priced gold more expensive for other currency holders.

New York Federal Reserve President John Williams said on Friday that U.S. interest rates could fall "in the near term" without putting the Fed's inflation goal at risk, while helping guard against a slide in the job market.

Investors are now pricing in an 81% chance of a Fed rate cut in December, up from 79% a day earlier and 40% last week, as per the CME FedWatch Tool. FEDWATCH

Non-yielding gold tends to do well in low-interest-rate environments.

Other Fed members have, however, maintained a hawkish stance. Dallas Fed President Lorie Logan called for leaving the policy rate on hold, while Fed presidents for Chicago and Cleveland warned that cutting rates further right now carries a wide range of risks for the economy.

Investor focus this week is on key economic data delayed by the government shutdown, including U.S. retail sales, jobless claims and producer price figures, for more clarity on the Fed's rate-cut path.

On the geopolitical front, U.S. and Ukrainian officials sought to narrow the gaps between them on Monday over a plan to end the war in Ukraine, after agreeing to modify a U.S. proposal that Kyiv and its European allies saw as a Kremlin wish list.

Elsewhere, spot silver XAG= slipped 0.3% to $51.24 per ounce, platinum XPT= rose 0.4% to $1,550.10, and palladium XPD= lost 0.1% to $1,393.66.