* Palladium about $31 above gold
* Investors eye Tuesday vote on Brexit deal
* U.S. government shutdown, Fed view also supports gold (Updates prices)By Arijit BoseJan 14 (Reuters) - Gold prices rose on Monday as globalstocks fell on an unexpected drop in China's exports thatsignaled further weakening in the world's second-largest economyand prompted investors to seek safety in the precious metal.Spot gold rose 0.4 percent to $1,291.99 per ounce at2:37 p.m. EST (1937) GMT, while U.S. gold futures settled0.1 percent higher to $1,291.3."The fact that U.S. stocks have opened lower and weak macronumbers from China on the trade figures today has been helpfulfor gold," INTL FCStone analyst Edward Meir said.
The faltering stock markets and weak Chinese data implyeconomic conditions could worsen during the course of the year,he added.Chinese exports fell by their most in two years in December,alongside a significant contraction in imports, data showed onMonday, hitting stock markets and highlighting fears of asharper slowdown in global growth.Gold, which is often used as a hedge against economic andpolitical uncertainty, has also been helped by concernssurrounding an impending vote on Britain's exit from theEuropean Union and a prolonged partial government shutdown inthe United States."If the partial government shutdown continues, it willeventually weigh heavily on equity prices, sending moreinvestors over to the gold and bond markets," Walter Pehowich,executive vice president of investment services at Dillon GageMetals, said in a note.Spot gold has gained more than 11 percent since hitting a1-1/2-year low in mid-August at $1,159.96.Extension of the shutdown and the subsequent U.S. economicslowdown "contributes to the fact that the U.S. Federal Reservewill likely not raise rates at all this year," INTL's Meir said.The metal was propped up last week after Fed Chairman JeromePowell reaffirmed that the central bank could remain patient onmonetary policy, downplaying suggestions that interest rateswould be raised twice more this year. Investors are eyeing U.S.-China trade developments, withU.S. officials expecting a visit by Beijing's top tradenegotiator this month after mid-level talks ended on a seeminglypositive note. Among other precious metals, palladium rose 0.4percent to $1,323.00 an ounce, after touching $1,341.70 in thesession. The metal was trading just below the all-time high of$1,342.43 reached last week, and about $31 above gold."Palladium has continued its march higher but $1,350/ozappears to be a pretty significant technical level," analysts atJP Morgan said in a note."Despite continued deficits, a potential recession on thehorizon still keeps us cautious on prices for the second half of2019 given that the metal lost more than 60 percent in each ofthe two previous recessions."Platinum shed 1 percent to $802.70 while silver gained 0.3 percent at $15.64. (Reporting by Arijit Bose in BengaluruEditing by Susan Thomas and Richard Chang)
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