PRECIOUS-Gold comes off highs after U.S. House Republicans propose tax cuts

    * Dollar, U.S. yields fall after tax reform unveiled
    * Trump set to announce Powell as next Fed chair
    * GRAPHIC-Central banks interest rates:
    * GRAPHIC-2017 asset returns:

 (Updates prices; adds comment, NEW YORK dateline)
    By Renita D. Young and Peter Hobson
    NEW YORK/LONDON, Nov 2 (Reuters) - Gold prices pared gains
after touching a two-week high on Thursday, after Republicans in
the U.S. House of Representatives unveiled legislation to
overhaul the U.S. tax system.  
    Investors also focused their attention on the nomination of
a new U.S. Federal Reserve chair, who could influence the pace
of future interest rate increases.
    The dollar fell and U.S. 10-year Treasury yields slid to
two-week lows after House Republicans proposed to slash the
corporate tax rate to 20 percent from 35 percent and reduce the
number of tax brackets for individuals.             
    "There was a slight bit of volatility around the time of the
tax cut announcement," said Dan Hussey, senior market strategist
at RJO Futures in Chicago, adding this caused gold prices to
come off their highs.
    Lower bond yields make non-yielding gold more attractive to
investors, while a weaker dollar makes bullion cheaper for
holders of other currencies. 
    Spot gold        was up 0.2 percent at $1,276.79 an ounce by
2:43 p.m. EDT (1843 GMT), after touching $1,284.10, the highest
since Oct. 20. 
    U.S. gold futures         settled up $0.80, or 0.1 percent,
at $1,278.10 per ounce.
    Investors were focused on the choice of the next Fed chair,
said James Butterfill, head of investment strategy at ETF
    U.S. President Donald Trump is expected on Thursday to
nominate Fed Governor Jerome Powell to replace Janet Yellen as
leader of the central bank.             
    "He (Powell) is probably slightly more dovish than Yellen,"
said Butterfill. 
    "That means perhaps also the prospect of fewer rate hikes
than the Fed is currently pricing for next year - possibly only
one or two. That's why gold is being supported."
    Markets are pricing a 97 percent likelihood of a rate
increase in December, according the CME Fedwatch tool, and the
pace of subsequent rises could be faster if the Republican tax
proposal was enacted and succeeded in speeding economic growth. 
    Investors hedging against the stock market possibly
overheating also drove gold prices up, said Miguel
Perez-Santalla, vice president of Heraeus Precious Metals in New
    Gold rose above its 100-day moving average at $1,275.62 but
indicators suggested prices would fall, analysts said. 
    "Gold continues to weigh on the downside and still implies a
   test of the current October low and the 200-day moving
average at $1,260.55/$1,260.89," said Commerzbank technical
    In other precious metals, silver        was down 0.2 percent
at $17.09 an ounce, after touching $17.24, its highest since
Oct. 20.
    Platinum        was down 1.1 percent at $921 an ounce and
palladium        was down 0.7 percent at $994.75 per ounce.

 (Additional reporting by Arpan Varghese in Bengaluru; Editing
by David Evans and Diane Craft)