November 8, 2017 / 7:40 PM / a year ago

PRECIOUS-Gold gains on possible delays in U.S. tax cut plan

    * GRAPHIC-Gold/silver ratio:
    * GRAPHIC-2017 asset returns:
    * Palladium-platinum premium at 16-year high

 (New throughout, updates prices, market activity and comments;
adds comment, second byline, NEW YORK dateline)
    By Renita D. Young and Zandi Shabalala
    NEW YORK/LONDON, Nov 8 (Reuters) - Gold rose on Wednesday,
hovering near a three-week high as the dollar retreated on
expectations of possible delays in long-awaited U.S. tax
reforms, while palladium hit its highest since 2001.
    Spot gold        was up 0.6 percent at $1,283.20 an ounce by
2:00 p.m. EST (1900 GMT). U.S. gold futures         for December
delivery settled up $7.90, or 0.6 percent, at $1,283.70 per
    U.S. House of Representatives Speaker Paul Ryan left the
door open to a possible delay in implementing lower tax rates
for corporations, following a media report that his fellow
Senate Republicans were exploring the option.             
    U.S. equities fell and the dollar index       , which
measures the greenback against a basket of six currencies,
dipped 0.1 percent toward 3-1/2 month lows touched in recent
    "The closer we get to the interest rate hike in December the
lower the price of gold should get," said Natixis precious
metals analyst Bernard Dahdah.
    A December interest rate hike has been priced into the
market, traders said. But a potential delay in the tax plan
could mean a moderation in interest rate increases next year,
which could support gold, they noted.
   "If (Republicans) can't get something done, you could see
more of a bid come back into gold," said Josh Graves, senior
market strategist at RJO Futures in Chicago.
    Rising U.S. interest rates tend to boost the dollar and lift
the opportunity cost of holding non-yielding assets such as
    In physical demand, industry officials and analysts warned
that India's gold imports in the last quarter of 2017 could drop
25 percent from a year ago due to weak demand during key
festivals and as investors seek better returns from riskier
assets like equities.
    In other precious metals, palladium        was up 2.4
percent at $1,016 an ounce, after hitting its highest since 2001
at $1,019.
    Palladium's premium over platinum hit $85 per ounce, also
its highest since May 2001. In September, palladium became more
valuable than platinum for the first time in 16 years.
    The metal, mostly used for auto catalysts to clean pollution
from exhaust fumes, has rallied on an expected supply deficit
and higher demand in the automobile market. Much of the demand
came from China and parts of the United States and the Caribbean
where vehicles were damaged by hurricanes, Graves said. 
    Meanwhile, silver        was up 0.9 percent at $17.11 an
ounce while platinum        was up 1.2 percent at $933.60 an

 (Additional reporting by Vijaykumar Vedala in Bengaluru,
editing by David Evans and David Gregorio)
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