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PRECIOUS-Gold edges up as dollar slips on U.S. tax bill worries

* Spot gold headed for first weekly gain in four

* Gold expected to test resistance at $1,262/oz - technicals

(Adds comment, updates prices) Dec 15 (Reuters) - Gold edged higher in Asian trade on Friday, heading for their first weekly gain in four, as the dollar sagged on concerns about the progress of U.S. tax reform. "The U.S. dollar is weakening a little and that's benefiting gold," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

Spot gold was up 0.3 percent at $1,256.59 an ounce at

0753 GMT, and has gained less than 1 percent so far this week.

U.S. gold futures were up 0.2 percent at $1,259 an

ounce.

The dollar weakened against the yen as wrangling over

a bill to change the U.S. tax code dented invesor confidence.

President Donald Trump's efforts to win passage of a sweeping tax bill in the U.S. Congress hit potential obstacles when two more Republican senators insisted on changes, joining a list of lawmakers whose support is uncertain. While uncertainty over U.S. tax reform has hurt the dollar and boosted gold, OCBC analyst Barnabas Gan said expectations of sustained global economic growth and higher interest rates should drag down gold prices in 2018. The U.S. Federal Reserve on Wednesday raised benchmark interest rates for the third time this year as expected, but kept its outlook of three rate rises in the next year unchanged.

Higher U.S. interest rates tend to boost the dollar and push bond yields up, weighing on greenback denominated, non-interest bearing gold. "Between now and towards the end of the year, I think markets will be a bit quiet. The downside will be between $1,240-$1,245 and upside $1,260-$1,265," said Leung at Lee Cheong Gold Dealers. Technical charts show spot gold could test resistance at $1,262, a break above which could lead to a gain to the next resistance at $1,276, said Reuters technicals analyst Wang Tao.

In other precious metals, silver was flat at $15.87 an ounce and platinum rose 0.4 percent to $881.80 an ounce. Palladium was down 0.1 percent at $1,031.99.

(Reporting by Apeksha Nair in Bengaluru; Editing by Manolo Serapio Jr.)