* Spot gold faces resistance at $1,262/oz -technicals
* Speculators cut net longs in gold in week to Dec 12
(Adds analyst comment, updates prices, adds LONDON dateline) LONDON, Dec 18 (Reuters) - Gold edged higher on Monday as uncertainty over U.S. tax reform weighed on the dollar, while an analyst said bullion may face renewed headwinds early next year. The dollar dipped against a basket of major currencies on Monday amid caution ahead of a vote in U.S. Congress on tax reform, making dollar-denominated bullion cheaper for buyers using other currencies. "If the whole thing (tax reform) falls apart at the last minute, it would be hugely positive for gold, but I think that is unlikely," said analyst Carsten Menke at Julius Baer in Zurich. If the tax bill passes, gold might dip slightly, but that scenario is largely priced in the market, he added. Top U.S. Republicans said they expected Congress to pass a tax code overhaul this week, with a Senate vote as early as Tuesday. Expectations that tax cuts would spur economic growth and prompt faster interest rate rises in the United States have boosted the dollar and weighed on gold.
Spot gold was up 0.2 percent at $1,257.90 an ounce by 1030 GMT while U.S. gold futures rose 0.3 percent to
$1,260.60 an ounce. Spot gold faces a resistance at $1,262 per ounce and may hover below this level or retrace to a support at $1,239, Reuters technicals analyst Wang Tao said. Looking at 2018, Menke expects a final bout of dollar strength to hit gold, sending prices down $25-$50, but then gold should recover. "The dollar should then run out of steam and that should help build a more fundamentally sound base for gold prices," he said. "Over the course of 2108 when the first concerns about a slowdown in growth creep into financial markets, you might also get some renewed safe-haven buying." Hedge funds and money managers cut their net long positions in COMEX gold contracts in the week to Dec. 12, while they switched to a net short stance in silver for the first time in five months, data showed on Friday. "Some 9,670 tons of silver were sold on the futures market in the last two CFTC reporting weeks and as much as 11,480 tons in the past four weeks. The latter equates to five months of global silver mining production," Commerzbank said in a note.
Silver which was unchanged at $16.05 an ounce, had
shed about 10 percent during the four weeks after touching a peak on Nov. 17.
Palladium fell 0.5 percent to $1,017.55 an ounce and platinum rose 0.5 percent to its highest since Dec. 8 at
$897.70 an ounce.
(Reporting by Apeksha Nair in Bengaluru; Editing by Joseph Radford and Tom Hogue)