By Marcy Nicholson and Pratima Desai
NEW YORK/LONDON (Reuters) - Gold rose to a seven-week high on Wednesday, turning positive as the dollar dropped and Treasury yields fell after U.S. President-elect Donald Trump spoke in his first formal news conference just days before taking office.
U.S. stocks lost ground in choppy trading, led by drug stocks after Trump said pharmaceutical companies were "getting away with murder" by charging high drug prices.
"At the lows of the session, gold received a much-needed 'Trump bump' when the president-elect triggered an equity and dollar selloff," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
"Trump's timely intercession prevented further losses and allowed gold to rally to new highs of the move at $1,198, helped by a strong 10-year Treasury auction, which sparked a bond rally."
Trump also denounced unsubstantiated claims he had been caught in a compromising position in Russia and said he handed off control of his global business empire to his two oldest sons.
Spot gold (XAU=) was up 0.4 percent at $1,192.61 an ounce by 2:32 p.m. EST (1932 GMT), after a choppy session that traded from $1,176.94 to $1,198.40, the highest since Nov. 23.
U.S. gold futures (GCcv1) settled up $11.1, or 0.94 percent, at $1,196.6 per ounce.
Analysts said elections over the course of the year in France, the Netherlands and Germany are likely to create political tensions in the European Union and support gold.
"The uncertainty surrounding Brexit could lead to further demand for gold from retail investors in the UK," Quantitative Commodity Research analyst Peter Fertig said.
Silver (XAG=) was up 0.5 percent at $16.70, but below Tuesday's four-week high of $16.90.
Platinum (XPT=) slipped 0.4 percent to $974.50 from an earlier two-month peak at 982.60 and palladium (XPD=) dropped 1.3 percent to $754.20 an ounce, not far from Monday's five-week high of $768.10.
Investors expect palladium, an industrial precious metal, will benefit if tax cuts and higher government spending in the major car markets of China and the United States boost auto sales.
"While the medium to longer-term demand backdrop remains compelling given its dominant usage in catalysts of gasoline fuelled cars, we still expect a short-term dent," Julius Baer analysts said in a note.
Palladium prices are closely linked to vehicle sales, which were strong last year.
"Sales in China were fuelled by a tax cut, prompting consumers to pull forward purchases. The tax cut was halved at the beginning of this year and should result in lower sales over the course of the coming months."
(Additional reporting by Swati Verma and Nallur Sethuraman in Bengaluru; Editing by Jane Merriman and Meredith Mazzilli)