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PRECIOUS-Gold little changed, on track for worst month this year

* Palladium gains 11 pct on quarter, up 38 pct in year so far

* Silver set for 4 percent decline in Sept.

* Platinum set for 7.1 percent decline in Sept.

(Rewrites paragraph 1, updates prices) Sept 29 (Reuters) - Gold traded little changed on Friday amid pressure from a stronger dollar, but was headed for its biggest monthly fall this year amid rising prospects of a U.S. rate hike in December.

Spot gold was nearly unchanged at $1,286.96 per ounce

as of 0720 GMT, on track to register a 2.5 percent decline in September, its largest monthly fall so far in 2017 and the biggest since November 2016. However, it was set to end the quarter around 3.7 percent higher.

U.S. gold futures rose 0.1 percent to $1,289.70 per

ounce. Gold is mostly being influenced by the dollar's movements in an otherwise quiet session, said Yuichi Ikemizu at ICBC Standard Bank in Tokyo.

The U.S. dollar inched higher and was on track for

its biggest weekly gain this year as investors pondered the Trump administration's tax plan and the outlook for U.S. Federal Reserve policy. "(Gold) will likely continue to struggle in the short term against a backdrop of higher interest rates, particularly in the U.S. and possibly in the U.K. and Europe," said INTL FCStone analyst Edward Meir. Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the greenback.

Meanwhile, palladium gained 0.7 percent to $935.70

per ounce. It was up 11 percent for the quarter and 38 percent so far in 2017.

Platinum rose 0.5 percent to $924 per ounce. The

metal is set for a 7.1 percent drop for September, its worst performing month since March. Palladium traded at a premium to platinum for a third straight day after prices for the two metals hit parity for the first time since 2001 on Wednesday. "Palladium is short-supplied and also there's very good demand from auto sectors. As long as this situation continues, we'll see a premium in palladium ," said Ikemizu. "If it goes on for a long time, car makers will have to switch from palladium to platinum, which was unthinkable in the past ... (However,) This current reversal probably won't be long enough for car makers to decide on substitution." Both metals are primarily consumed by automakers for catalytic converters, but platinum is more heavily used in diesel vehicles that have fallen out of favour.

Meanwhile, silver edged 0.1 percent higher to $16.84

per ounce and was on track for a 4 percent loss on month, but was set to end the quarter 1.7 percent higher.

(Reporting by Nithin Prasad and Arpan Varghese in Bengaluru; Editing by Christian Schmollinger and Vyas Mohan)