November 9, 2017 / 11:34 AM / a year ago

PRECIOUS-Gold rises on weak dollar; palladium dips from 16-year high

    * GRAPHIC-2017 asset returns:
    * Palladium-platinum premium at 16-year high

 (New throughout; updates prices, market activity and comments,
adds second byline, NEW YORK dateline))
    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, Nov 9 (Reuters) - Gold was higher on
Thursday as a weaker dollar pushed prices during the session to
a three-week high for the second time in successive days, while
palladium dipped but stayed close to 16-year peak hit during the
    Spot gold        was up 0.4 percent at $1,286.27 an ounce by
1:42 p.m. EST (1842 GMT), after touching $1,288.13, its highest
since Oct. 20.
    U.S. gold futures         for December delivery settled up
$3.80, or 0.3 percent, at $1,287.50 per ounce. 
    The dollar fell to a six-day low against a basket of
currencies       , as investors balked at emerging details of
the U.S. Senate Republicans' version of a tax cut plan.       
    "Although the dollar's travails have brought a smile to
long-suffering bullish gold traders, it is important to note
there seems to be an absence of risk aversion premium in gold's
price and that its fate will be decided by the dollar alone,"
said Jeffrey Halley, a senior market analyst with OANDA.
    U.S. Senate Republicans' version of the tax bill will delay
corporate rate cuts by one year, and will not repeal the
Affordable Care Act's individual mandate, Republican Senate
Finance Committee member Bill Cassidy said ahead of the plan's
    Though gold still drew short-term support from uncertainty
over the U.S. tax bill, "the overall trend has shifted into a
neutral to negative trend, even though you've got pretty solid
demand coming out of speculators," said Rob Haworth, senior
investment strategist for U.S. Bank Wealth Management.
    Data from the World Gold Council showing that gold demand
slid in the last quarter to its lowest in eight years as jewelry
buying fell and inflows into bullion-backed exchange-traded
funds dried up.             
    Among other metals, palladium        was down 0.2 percent at
$1,011 an ounce, after hitting $1.026.10, its highest since
    Palladium's premium over platinum hovered near its highest
since 2001. In September, palladium became more valuable than
platinum for the first time in 16 years.
    "There's been an unease around the platinum market. The
impact and weakening in demand in that sector has subsequently
benefited palladium," said ANZ analyst Daniel Hynes. 
    Platinum is more heavily used in diesel vehicles, which have
fallen out of favor since 2015's Volkswagen emissions-rigging
    Palladium has benefited from the switch to petrol engines
and expectations for growth in hybrid gasoline-electric
    Meanwhile, silver        shed 0.2 percent at $16.98 an ounce
while platinum        gained 0.8 percent at $938.30 an ounce.

 (Additional reporting by Vijaykumar Vedala in Bengaluru;
Editing by David Gregorio; Editing by Edmund Blair and David
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