* Gold on track for biggest weekly gain in five weeks
* Silver heading for best week in five
* Palladium poised for strongest daily gain since early June
(Recasts; updates prices; adds comment, NEW YORK dateline, byline) NEW YORK/LONDON, Nov 17 (Reuters) - Gold jumped to a one-month high on Friday as the dollar softened on uncertainty about the progress of a proposed overhaul of the U.S. tax code that would be the biggest since the 1980s. "With the ultimate fate of tax reform in Congress in serious doubt and the Alabama Senate race threatening to narrow the already wafer-thin GOP majority, sentiment has turned sharply against the dollar, which may finally allow gold to test key medium-term resistance at $1,310 early next week," said Tai Wong, head of base and precious metals trading at BMO Capital Markets in New York. On Thursday, the U.S. House of Representatives approved a package of tax cuts, while a Senate panel advanced its version of the legislation that has President Donald Trump's backing. The Senate version of the measure has already encountered resistance from some within the Republican ranks. This fed doubt among investors which hurt the dollar and helped gold.
Spot gold was up 1.2 percent at $1,293.53 an ounce by
2:30 p.m. EST (1930 GMT), on track for the biggest one-day jump since Aug. 28. It rose to the highest price since Oct. 16 at $1,297. For the week, it was poised to finish up 1.3 percent, its strongest weekly performance since mid-October.
U.S. gold futures for December delivery settled up
1.4 percent at $1,296.50. "There's also a lot of concern that the equity market rally is possibly becoming a little exhausted for now, and that should be supportive of gold in the short term," said Jonathan Butler, commodities analyst at Mitsubishi in London. The dollar weakened against a basket of six currencies and was set for its biggest weekly loss in more than a month. Wall Street stocks fell as investors worried about the tax plan and also pulled back from technology.
Julius Baer analyst Carsten Menke said the dollar should strengthen as the U.S. Federal Reserve continues to raise rates. "Volatility in the gold market is down towards record lows with most of the short-term swings caused by shifting expectations about the outlook for U.S. monetary policy," he said in a note. "While we still see gold trading lower heading into 2018, short-term headwinds should fade as the year progresses."
Silver followed gold higher and was up 1.4 percent at
$17.31 an ounce.
Platinum rose 2.3 percent to $952.30, after rising to
$954.30, the highest since Sept. 20, while palladium gained 1 percent to $996.75. For the week, silver has risen 2.5 percent, in what would be its best week in five. Platinum is up 2.8 percent, heading for a third straight weekly rise, while palladium is up 0.3 percent.
(Additional reporting by Vijaykumar Vedala and Arpan Varghese in Bengaluru; Editing by David Gregorio and Mark Potter)