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

* GRAPHIC-Gold/silver ratio: http://tmsnrt.rs/1UXSq7n

* GRAPHIC-2017 asset returns: http://tmsnrt.rs/2jvdmXl

(Updates throughout, adds LONDON dateline) LONDON, Nov 8 (Reuters) - Gold rose on Wednesday as the dollar eased on expectations of possible delays in long-awaited U.S. tax reforms but a looming U.S. interest rate increase in December kept a lid on gains.

Spot gold was up 0.4 percent at $1,280.58 per ounce

as of 1122 GMT. It fell about 0.5 percent on Tuesday.

U.S. gold futures for December delivery gained 0.4

percent to $1,281 an ounce. Senate Republican leaders are considering a one-year delay in implementing the centrepiece tax cut to comply with Senate rules, the Washington Post reported on Tuesday, citing sources.

This pulled the dollar index , which measures the

greenback against a basket of six currencies, down 0.1 percent and towards the 3-1/2 month lows touched in recent weeks. Societe Generale analyst Robin Bhar said the news of a potential delay could mean a moderation in interest rate increases next year which would boost the appeal for gold. "The December rate hike is baked in but the market is looking more forward on interest rates into 2018. If the tax cuts are delayed then the U.S. Federal Reserve can be a bit more relaxed," Bhar said. Gold is sensitive interest rates, particularly in the United States, as higher rates lift the opportunity cost of holding non-yielding assets and boost the dollar, in which it is priced. "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. 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 such as equities. MKS analyst Alex Thorndike said $1,280-85 level remains the ceiling for gold prices at the moment. An anti-graft purge in Saudi Arabia and President Donald Trump's visit to South Korea amid tensions with the North could boost prices of the yellow metal, analysts said. Investors often seek safety in gold in times of economic or political turmoil. "While the fundamentals are showing that gold prices should fall into 2018, these geopolitical events could cloud the fundamentals," OCBC analyst Barnabas Gan said.

In other precious metals, silver gained 1 percent to $17.12 an ounce. Platinum was up 0.8 percent at $930 an ounce and palladium rose 0.8 percent to $1,001 per ounce.

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