(Updates prices)
* U.S. military carry air strikes in Iraq and Syria
* SPDR Gold holdings rise to highest since Nov. 29
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl
By Sumita Layek
Dec 30 (Reuters) - Gold prices rose to their highest in more than two months on Monday in thin year-end trading as the dollar dipped and U.S. military strikes in the Middle East supported safe-haven buying.
Spot gold XAU= was up 0.2% to $1,513.30 per ounce at 0757 GMT after hitting its highest level since Oct. 25 at $1,515.80. U.S. gold futures GCcv1 were down 0.1% at$1,516.90.
"We are looking at pre-positioning for next year and a rebalancing of portfolios ahead of year-end, overlaid with very low liquidity levels, that are essentially exacerbating the volatility," said Ilya Spivak, a senior currency strategist at DailyFx.
Gold is receiving modest support from the U.S. air strikes in the Middle East, Spivak said.
The U.S. military on Sunday carried out air strikes in Iraq and Syria against an Iran-backed militia group. is considered a safe investment in times of geopolitical and economic uncertainty.
The dollar also slipped against a basket of rivals, making gold cheaper for holders of other currencies. USD/
Gold prices have risen nearly 18% this year and are on track for their best year since 2010, mainly due to a 17-month-long Sino-U.S. tariff war and its impact on global economic growth.
"But from a pure macro and risk perspective, it currently makes little sense for gold to be trading above $1,500/oz. A surging equity market and higher gold prices seldom, if ever, exist in the same timeframe and simultaneously move higher," Stephen Innes, a market strategist at AxiTrader, said in a note.
On the trade front, China's Commerce Ministry on Sunday said it has "proactively dealt with" trade frictions with the United States this year. participants, however, remain wary even as Washington and Beijing move close to ratifying a trade deal. of investor sentiment, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD , rose 0.1% to 893.25 tonnes on Friday, its highest since Nov. 29. GOL/ETF
Among other precious metals, silver XAG= rose 0.9% to$17.91 per ounce, while platinum XPT= climbed 0.8% to $951.90. Palladium XPD= rose 0.2% to $1,908.11 per ounce.