* Gold stabilizes after biggest drop in two weeks on Friday Equities pull back from record on U.S. tax plan jitters
* GRAPHIC-2017 asset returns: http://tmsnrt.rs/2jvdmXl
(Updates prices; adds comment, NEW YORK dateline, byline) NEW YORK/LONDON, Nov 13 (Reuters) - Gold recouped some of the previous session's hefty losses on Monday as the U.S. dollar steadied and uncertainty over a U.S. tax reform plan stoked risk aversion, pulling equities from their recent record highs. Prices remained stuck in a narrow range, however, as investors awaited more clues on the path of U.S. interest rates.
Spot gold was up 0.2 percent at $1,279 an ounce by 1:41 p.m. EST (1841 GMT), while U.S. gold futures for
December delivery settled up $4.70, or 0.4 percent, at $1,278.90 per ounce. The metal has remained broadly within $15 an ounce of its 100-day moving average, currently at $1,277 an ounce, for most of the last month. Gold fell 0.7 percent on Friday in its biggest one-day drop since Oct. 26, weighed down by a rise in U.S. Treasury bond yields. Yields rose, steepening the yield curve, as traders closed out some curve-flattener positions. While the increase in yields supported the dollar early on Monday, it later pared gains. Stock markets also took a step down as uncertainty over a U.S. tax reform deal pushed them further away from recent record highs.
"The downside risk may be outweighing upside risk, particularly if the U.S. legislators cannot deliver the often talked about and promised tax cuts," said Bart Melek, head of commodity strategy at TD Securities in Toronto. Gold has been supported this year by geopolitical risks such as the North Korea's nuclear ambitions, but a range of headwinds, from dollar strength to expectations for rising U.S. rates, have kept it pinned in a range. "There is a bit of safe-haven demand still supporting prices, but no new additional demand coming in, which means that prices aren't really moving," Capital Economics analyst Simona Gambarini said. "I think some movement will come closer to the next Federal Reserve meeting in December," she added. "Most markets expect a rate hike ... that could be what prompts prices higher or lower, depending on what happens." Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Among other precious metals, silver was up 0.9 percent at $17.05 an ounce. Platinum was up 0.8 percent at $933.40 an ounce and palladium was down 0.4 percent at
$990.40 an ounce.
(Additional reporting by Vijaykumar Vedala and Arpan Varghese in Bengaluru; editing by Louise Heavens and Tom Brown)