* Dollar falls slightly after biggest weekly gain this year
* Speculators cut bullish COMEX gold bets for seventh week
* GRAPHIC-2017 asset returns: http://tmsnrt.rs/2jvdmXl
(Recasts; updates prices; adds comment, NEW YORK dateline) NEW YORK/LONDON, Nov 6 (Reuters) - Gold rose more than 1 percent on Monday, extending gains as geopolitical risks drove investors to safe-haven assets after the metal's third-straight weekly decline. The U.S. dollar dropped against a basket of currencies, also boosting gold.
Spot gold was up 1 percent at $1,281.46 an ounce by 1:58 p.m. EST (1858 GMT), while U.S. gold futures for
December delivery settled up $12.40, or 1 percent, at $1,281.60 per ounce. "Geopolitical issues in Saudi Arabia over the weekend and into today drove the price of gold up," said David Meager, director of metals trading at High Ridge Futures in Chicago, citing investors who bought into gold as a safe haven. Saudi Arabia's future king, Crown Prince Mohammed bin Salman, tightened his grip on power through an anti-corruption purge by arresting royals, ministers and investors including billionaire Alwaleed bin Talal who is one of the kingdom's most prominent businessmen. The dollar dipped on Monday after its biggest weekly rise this year, while Germany's benchmark bond yield held near two-month low as investors awaited clues on the European Central Bank's asset purchase plans. U.S. 10-year yields also hit their weakest in two weeks. Gold has drifted lower over recent weeks, pulling back 2.5 percent from its mid-October peak as expectations for a Fed interest rate increase were shored up by upbeat U.S. data. Bullion is highly sensitive to rising U.S. rates, as these increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced. Hedge funds and money managers reduced their net long position in COMEX gold contracts for the seventh straight week, in the week to Oct. 31, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday. "Speculative financial investors are still withdrawing from gold," Commerzbank said on Monday. Hedge funds and money managers reduced their net long position in gold to 6,508 contracts to 166,535 contracts CFTC said on Friday, the smallest since early August. Speculators withdrawing from gold likely drove the gold-silver ratio to 74.14, its lowest since early June, said Jeffrey Christian, managing partner of CPM Group in New York. "Short-term investors who saw the ratio rise earlier are cycling out of gold and into silver, thinking silver will play catch-up and outperform gold," he said. The gold-silver ratio shows the amount of silver ounces it takes to purchase one ounce of gold.
Among other precious metals, silver up 2.4 percent at $17.20 an ounce, platinum up 1.4 percent at $931.75, and palladium was up 0.2 percent at $998.50 an ounce.
(Additional reporting by Vijaykumar Vedala in Bengaluru; editing by Louise Heavens and Tom Brown)