BENGALURU, Dec 14 (Reuters) – Gold prices steadied on Friday, after slipping to a week-low in the previous session, supported by the uncertainty around the Federal Reserve’s next year’s policy outlook, while the dollar strengthened on expectations of a rate hike next week. FUNDAMENTALS: * Spot gold was steady at $1,242.11 per ounce, as of 0133 GMT. Prices fell to their lowest level since Dec. 7 at $1,239.83 on Thursday. * U.S. gold futures were down 0.1 percent at $1,246.4 per ounce. * Spot palladium was down 0.3 percent at $1,256.05 per ounce, trading at a premium to gold. Prices hit an all-time high of $1,269.25 in the previous session. * The dollar firmed against major counterparts as investor focus shifted to an expected U.S. interest rate hike next week, although gains are likely to be capped on greater uncertainty about next year’s policy outlook. * Asian shares were on the defensive as investors kept a wary eye on economic tensions between Washington and Beijing, while the euro was steady after the European Central Bank halted new bond purchases as expected. * The number of Americans filing applications for jobless benefits tumbled to near a 49-year low last week, which could ease concerns about a slowdown in the labour market and economy. * The risk of a U.S. recession in the next two years has risen to 40 percent, according to a Reuters poll of economists who also found a significant shift in expectations toward fewer Federal Reserve interest rate rises next year. * European Union leaders assured Prime Minister Theresa May on Thursday that the Brexit treaty she agreed last month but is struggling to get through UK parliament should not bind Britain forever to EU rules. * The European Central Bank formally ended its 2.6 trillion euro crisis-fighting bond purchase scheme on Thursday but promised to keep feeding stimulus for years into an economy struggling with an unexpected slowdown and political turmoil. * Workers will return to Gold Fields’ sole South African mine on Thursday after a six-week strike was called off by the country’s National Union of Mineworkers (NUM), with production likely to resume in earnest after Christmas.