* Gold up for a third day above $1,410/oz
* Palladium hits nine-year peak, silver at 30-year highs
* Coming up: U.S. initial jobless claims; 1330 GMT
(Updates prices)
By Amanda Cooper
LONDON, Dec 30 (Reuters) - Weakness in the U.S. dollar and a
year-end flurry of investment in commodities kept gold near its
highest in three weeks on Thursday, while palladium hit fresh
nine-year highs after almost doubling in price this year.
Silver shot to new 30-year peaks as it benefited from
strength in other industrial commodities, putting it on course
for an 83 percent gain this year, its strongest performance in
nearly 30 years.
The dollar weakened broadly after the largest one-day
decline in five-year Treasury yields <US5YT=RR> in three months
removed some of the currency's appeal to non-U.S. investors.
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Gold is set for its tenth consecutive annual gain, having
risen by nearly 30 percent in 2010, its strongest yearly
performance since a 31 percent rise in 2007 when the global
financial crisis began to unfold.
Spot gold <XAU=> was last at $1,411.45 an ounce by 1227 GMT,
having risen for three straight trading sessions to its highest
since Dec. 7, when it touched a record high $1,430.95.
Gold's inverse correlation to the dollar index <.DXY>
reached its strongest in eight weeks on a 30-day rolling basis.
"Overall, I don't think today or tomorrow we are going to
have any kind of correction as such," said Afshin Nabavi, MKS
Finance head of trading.
"I'm quite friendly towards it and probably feel that
tomorrow night we are going to end the year with some fireworks
as well," referring to the potential for gains in other metals.
BOOST TO GOLD
The euro zone debt crisis, which unfolded in April this year
and culminated in multi-billion euro international bailouts for
both Greece and Ireland, has been one of the prime drivers of
investment demand for gold.
Holdings of gold in the SPDR Gold Trust <GLD>, the world's
largest exchange-traded fund backed by physical bullion, have
risen 15 percent this year to 1,284.062 tonnes, and a near 20
percent rise in open interest in U.S. gold futures also reflects
some of this investor desire to hold gold. [] <0#CFTC>
Gold prices were well supported after breaking above the key
$1,400 threshold earlier this week, helped by strong physical
demand in Asia.
Palladium notched up a fourth straight day of increases and
was set for a second year of gains, having almost doubled to
near $800 an ounce over the course of 2010 and is this year's
top performing commodity.
Analysts widely expect a surge in demand for palladium next
year, mainly from China, which boasts the world's largest auto
market that is dominated by gasoline-powered vehicles, which use
palladium in their catalytic converters.
The ratio of platinum to palladium has fallen to its lowest
in about eight years this year, mirroring palladium's
outperformance over platinum, which relies heavily on the
flagging European car market as a source of industrial demand.
Spot palladium <XPD=> rose to a nine-year high of $795.00
before trading back at $792.97, up 0.3 percent on the day, while
platinum <XPT=> rose to a session high of $1,767.5, its highest
since Nov 11, before holding largely steady at $1,753.99.
Silver <XAG=> hit a 30-year high of $30.88 an ounce, before
easing to $30.69, up 0.5 percent on the day.
In the penultimate trading day of the year, investors will
keep their eye on the weekly initial jobless claims data from
the United States to gauge the health of the world's largest
economy.
"If the initial claims data comes positive, it could prompt
some profit-taking in gold," said Ong Yi Ling, an analyst at
Phillip Futures.
(Additional reporting by Rujun Shen in Singapore, editing by
Keiron Henderson)
