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Gold gains as talk of dovish Fed chair knocks dollar:

* Dollar hit by report Powell favoured to succeed Yellen
* Markets have largely priced in Fed rate hike in December

(Recasts with news comments and details, changes dateline)
By Maytaal Angel
LONDON, Oct 4 (Reuters) - Gold rose on Wednesday afterc
marking a seven-week low the previous session, as the dollar
dipped on talk that a dovish Federal Reserve chair would be
appointed next year.
The greenback eased against a currency basket after a
Politico report said Fed Governor Jerome Powell was favoured by
U.S. Treasury Secretary Steven Mnuchin over former governor
Kevin Warsh. Janet Yellen's term as chair expires in February.
Powell is seen as more dovish than Warsh, who has criticised
the Fed's bond-buying programme in the past.
"The market is looking at the dollar at the moment, we've
seen an unwind of the fear trade linked to North Korea. That
trend is likely to continue," said Martin Arnold, commodity
strategist at ETF Securities.
"The dollar will grind higher in the next couple of months,"
he added.
ETF sees spot gold edging down to $1,260 an ounce by the
year-end.
Having touched its lowest since mid-August on Tuesday, spot
gold rose 0.4 percent to $1,276.87 an ounce by 1008 GMT.
The precious metal is down some 6 percent from a one-year high
of $1,357.54 hit in early September.
U.S. gold futures for December delivery rose 0.4
percent to $1,279.60.
Dollar money market futures were pricing in about a 70
percent chance of a rate hike by December, but a more dovish Fed
candidate would likely prompt investors to bet on less
aggressive retreat from the current loose monetary policy.
A weaker dollar makes dollar-priced gold cheaper for
non-U.S. investors.
In wider markets, global equities hit a record high with
investors in exuberant mood in the United States overnight and
in Asia later, but sentiment in Europe was soured by a political
crisis gathering steam in Spain.
Soaring equities tend to dent the appeal of gold, seen as a
safe haven.
"We still feel comfortable with our cautious view on gold as
the rebound of the dollar should continue while the slide in
(gold) prices increases the risk of further position squaring in
the futures market and could trigger selling in the physical
market," said Julius Baer in a note.
Holdings of the largest gold-backed exchange-traded-fund,
New York's SPDR Gold Trust GLD, fell 0.58 percent on Tuesday
from Monday, while the largest silver-backed ETF, New York's
iShares Silver Trust SLV, fell 0.04 percent.
Silver climbed 1 percent to $16.75 an ounce.
Platinum rose 0.9 percent to $917.20 an ounce, while
palladium climbed 0.4 percent to $918.50. The sister
metals, widely used as autocatalysts, hit price parity for the
first time in 16 years last week.

http://www.reuters.com/article/global-precious/precious-gold-gains-as-talk-of-dovish-fed-chair-knocks-dollar-idUSL8N1MF2GY