Gold holds below 5-week high on weaker dollar

REUTERS - Gold on Tuesday hovered below a 5-week peak hit the session before as the dollar weakened, although the prospect of further U.S. rate hikes curbed gains.

FUNDAMENTALS

* Spot gold had edged up 0.1 percent to $1,181.81 an ounce by 0054 GMT. It touched $1,185.80 on Monday, its highest since Dec. 5.

* U.S. gold futures were down 0.3 percent at $1,181.90 per ounce.

* The dollar index, which measures the greenback against a basket of currencies, was down 0.1 percent at 101.85.

* The Federal Reserve should consider trimming its $4.5 trillion balance sheet to help raise interest rates more quickly and reduce the negative impact on the economy of a stronger dollar, Eric Rosengren, president of the Boston Fed, said on Monday.

* Recovery from the economic crisis is "largely done," and officials should now turn to addressing longer-term issues like how to boost productivity, Atlanta Federal Reserve bank president Dennis Lockhart said on Monday. Lockhart said he still felt the Fed may only need to raise rates twice this year.

* The outlook for U.S. rates may become even clearer when Chair Janet Yellen appears at a webcast town hall meeting with educators on Thursday.

* A focus for the week will be a news conference on Wednesday at which Trump may give more details about the policies he will seek to implement after he takes office on Jan. 20.

* Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 1.06 percent to 805.00 tonnes on Monday.

* Auryn Resources Inc said on Monday that Goldcorp Inc, the world's third-largest gold producer by market value, would buy a stake in the Canadian exploration company for C$35 million ($26.49 million), sending its shares up nearly 15 percent.

(Reporting by Swati Verma in Bengaluru)