PRECIOUS-Gold edges lower in thin trade as dollar firms

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Analysts target $2,800/oz for gold by mid-2025

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Dollar rises by 0.5% against its rivals

(Updates with mid-session trading)

By Anushree Mukherjee

Dec 23 (Reuters) - Gold prices eased on Monday on a firmer dollar, in thin, holiday-season trade and as investors sought further clues on the U.S. Federal Reserve's monetary policy for next year after its latest meeting signaled easing would be gradual.

Spot gold was down 0.2% at $2,616.06 per ounce, as of 1158 GMT. U.S. gold futures eased 0.6% to $2,630.00.

The dollar index was up 0.5% against its rivals and hovered around a two-year high. A stronger dollar reduces gold's appeal for holders of other currencies.

"(It's a) quiet day with lower liquidity and limited data releases during the holiday season," UBS analyst Giovanni Staunovo said.

"We retain a constructive outlook for gold in 2025, targeting a move to $2,800/oz by mid-2025."

The Fed cut rates by 25 basis points on Dec. 18, although the central bank's predictions of fewer rate cuts in 2025 resulted in a decline in gold prices to their lowest level since Nov. 18 last week.

Non-yielding gold tends to thrive in a low interest rates environment.

U.S. consumer spending increased in November, supporting the Fed's hawkish stance, a sentiment that was also shared by San Francisco Fed President Mary Daly.

"Presently, we are in a lull for Christmas week with the gold price trending sideways. Federal Reserve policy is clear with expectations of rising interest rates in the second half of the year," said Michael Langford, chief investment officer at Scorpion Minerals.

"The next big impact is the incoming presidency of (Donald) Trump and the initial presidential decrees that he might declare. This has the potential to add to market volatility and be bullish for gold prices."

Gold, often considered a safe-haven asset, typically performs well during economic uncertainties.

Spot silver rose 0.3% to $29.61 per ounce and platinum climbed 0.9% to $934.44. Palladium fell 0.4% to $916.87.

(Reporting by Anushree Mukherjee and Rahul Paswan in Bengaluru, additional reporting by Swati Verma; Editing by Shilpi Majumdar and Barbara Lewis)