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

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

* GRAPHIC- (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 session.

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 release. 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 2001.

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 scandal.

Palladium has benefited from the switch to petrol engines and expectations for growth in hybrid gasoline-electric vehicles.

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 Evans)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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