* Platinum at discount to palladium for first time in 16 years Dollar rises on hawkish Fed, strong data
* GRAPHIC-Platinum/palladium ratio: http://tmsnrt.rs/1QjSZAC
(Adds comments, updates prices) Sept 28 (Reuters) - Gold held steady on Thursday after hitting a more than one-month low, pressured by the increasing likelihood of a U.S. interest rate hike in December and as a new tax plan boosted the dollar on the back of stronger economic data. Platinum, meanwhile, was trading at a discount to palladium for the first time since 2001 on waning demand for diesel cars. "Higher U.S. yields and continued strength in the U.S. dollar post-President Trump's tax announcements has eroded gold's asset appeal in the absence of geopolitical saber rattling in the last couple of days," said Jeffrey Halley, senior market analyst at OANDA.
Spot gold was nearly unchanged at $1,280.26 per ounce
at 0501 GMT after it hit its lowest since Aug. 25 earlier in the session.
U.S. gold futures for December delivery fell 0.3
percent to $1,283.30 per ounce. "In the near term, we're still looking at interest rates for direction," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. "There is a 75 percent chance for a rate hike in December now and unless North Korea does something, I think gold will be under pressure." France's foreign minister said on Wednesday that Donald Trump's verbal jousting with North Korea was perhaps not the best method to handle the nuclear crisis and urged the U.S. president to focus his attention on raising diplomatic pressure on Pyongyang. The dollar and U.S. bond yields rose on Thursday after President Trump proposed the biggest U.S. tax overhaul in three decades and as strong economic data added to the case for a rate hike by the Federal Reserve later this year. A stronger dollar makes bullion more expensive for holders of other currencies, while higher interest rates lead to higher bond yields and dampen demand for non-yielding gold.
In other precious metals, platinum dipped 0.1
percent, to $915.50 per ounce after hitting its lowest since
July 20, while palladium declined 0.3 percent to $923.65
per ounce. Palladium hit price parity with its better-known sister metal platinum on Wednesday for the first time since 2001, as demand expectations for the two assets diverge. Platinum is more heavily used in diesel vehicles that 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 electric vehicles, which tend to be gasoline-powered.
Silver fell 0.2 percent to $16.71 per ounce, after
dropping to $16.72 per ounce, its lowest since Aug. 16.
(Reporting by Nithin Prasad and Arpan Varghese in Bengaluru; Editing by Richard Pullin)