(Updates prices)
* Wall Street opens at record levels
* Dollar index gains, but stands near 6-month low
* Palladium jumps to 2-week high of $1,965.02/oz
By Karthika Suresh Namboothiri
Jan 2 (Reuters) - Gold prices on Thursday began the year with a healthy start, boosted by doubts surrounding the strength of Wall Street's rally, while platinum added 3% on industrial demand.
Spot gold XAU= was up 0.6% at $1,525.57 per ounce as of 1:49 p.m. ET (1849 GMT), having notched a three-month high of $1,531.20 earlier in the session.
U.S. gold futures GCcv1 settled 0.3% higher at $1,528.10 an ounce.
"Investors are coming back from the holidays and repositioning their portfolios," said Jeffrey Christian, managing partner of CPM Group, citing the rally in equities as the main reason for diversification.
"The fact that stock markets are at record highs is continuing to strengthen gold and silver. There is nervousness about why the stock markets are as high as they are, given the economical and political environment."
U.S. stocks kicked off the new year at record levels as fresh stimulus from Beijing to prop up its slowing economy lifted risk appetite. .N prices were further boosted by uncertainties surrounding the U.S.-China trade negotiations. U.S. President Donald Trump said on Tuesday that a "phase-one" of the deal would be signed on Jan. 15, though considerable confusion remains about its details. much-awaited trade deal between the world's two largest economies was expected to have been inked by the end of 2019. However, with merely the initial chunk of the deal placed on the table for talks, investors remain apprehensive.
The dollar .DXY rose 0.5% in the session, but was trading not far from a six-month low hit on Tuesday. USD/ Gold benefits from a weaker dollar, in which the precious metal is priced.
"Technically, the gold bulls have the overall near-term technical advantage as an accelerating price uptrend is in place on the daily chart," Kitco Metals senior analyst Jim Wyckoff said in a note.
Spot gold may test a resistance at $1,531 per ounce, a break above which could lead to a gain to $1,542, according to Reuters technical analyst Wang Tao. TECH/C
Elsewhere, platinum XPT= jumped 3% earlier in the session to $991.19 an ounce, its highest since Sept. 5. It was currently up 0.7% at $969.29.
Palladium XPD= gained 0.7% to $1,952.92. Prices advanced to $1,965.81 earlier in the session, their highest since Dec. 17.
"Palladium and platinum are showing strength because people have backed away from fears of an imminent recession, or seeing that even with weaker growth, we are still growing," CPM Group's Christian said.
Silver XAG= climbed 0.9% to $17.98 an ounce.
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