TREASURIES-U.S. bond prices little changed, yield curve flattest since Aug

* U.S (Other OTC: UBGXF - news) . yield curve holds at flattest since August

* Growing consensus on Fed raising rates in December

* Gradual U.S. rate rises seen after liftoff

By Tariro Mzezewa

NEW YORK, Nov 20 (Reuters) - U.S. Treasuries prices were little changed on Friday as U.S. stocks rallied amid growing confidence that the Federal Reserve will raise interest rates in December.

Earlier this week, longer-dated issues performed better than shorter ones as investors bet that shorter-term Treasury yields would rise faster than longer-dated issues after the Fed on Wednesday released minutes from its October policy meeting. Those minutes reinforced expectations of a December rate liftoff and thereafter, a gradual pace of rate increases.

"The Fed will be raising rates into an environment of low inflation and weakening commodity prices, which explains the curve flattening we've seen in recent days," said Tom Simons, money market strategist at Jefferies & Co. in New York.

The yield curve had flattened with the yield gap between five-year and 30-year Treasuries contracting to its tightest level since August. The five-year and 30-year yield spread was 1.34 percentage points, compared with 1.33 points on Thursday.

Wall Street rallied partly on relief the Fed would raise rates gradually, paring some bids for lower-yielding Treasuries.

"It (Other OTC: ITGL - news) 's setting in that even if the Fed does hike in December and increase gradually, they're not going to get on a sustained path of hikes," said Justin Hoogendoorn, head of fixed income strategy at Piper Jaffray in Chicago, Illinois.

The yield curve had flattened also as investors received fairly upbeat data on jobless claims and manufacturing in the mid-Atlantic region on Thursday.

Meanwhile, the Fed's minutes and remarks from several Fed officials this week buttressed a view that the central bank will raise rates gradually.

"The pace of increases may be somewhat slow and possibly more halting than historic episodes of rising rates," said Atlanta Fed President Dennis Lockhart in a speech to a business group in Atlanta (BSE: ATLANTA.BO - news) on Thursday.

The 30-year bond was down 2/32 in price to yield 3.007 percent, up about .005 basis point from late on Thursday, and the five-year note was up 1/32 in price to yield 1.671 percent, down 0.5 basis point.

Benchmark 10-year Treasuries were up 1/32 in price for a yield of 2.242 percent, down .005 basis point. (Editing by Bernadette Baum)