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PRECIOUS-Gold rises on weakening dollar, palladium hits 17-year peak

* Dollar retreats 0.2 pct vs the euro, lifting gold

* Palladium hits near 17-year high, eyes Feb. 2001 peak

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

(Updates throughout, adds LONDON dateline) LONDON, Dec 27 (Reuters) - Gold rose for an eighth straight session on Wednesday as a retreat in the dollar encouraged some investors to buy into the metal, while this year's leading precious metal palladium hit another near 17-year peak. Gold prices have risen more than 3 percent over the last two weeks as the dollar, in which the metal is priced, turned lower.

Spot gold was up 0.2 percent at $1,285.35 an ounce at 1030 GMT, while U.S. gold futures for February delivery

were $2.60 an ounce higher at $1,290.10. "A lack of liquidity and the weakness of the U.S. dollar are bringing more interest into the precious metals," Afshin Nabavi, head of trading at MKS in Switzerland, said. "Not everybody is at their desks, especially last Friday and yesterday." "We may try to test the waters around $1,300," he said. "There seems to be a bit of physical interest coming from the Chinese side as we approach the (Lunar) New Year in February. I wouldn't be surprised if this buying continues." The dollar fell against the euro on Wednesday. Traders said there was little news to support the euro's rise, though some investors have positioned for a possible strengthening in the single currency into the new year following a stellar 2017, its best year versus the greenback since 2003. Despite a relatively static fourth quarter, gold is up 10 percent this year, on track for its biggest annual rise since 2010. Weakness in the dollar, geopolitical concerns centring on North Korea, and receding expectations that U.S. interest rates would be raised quickly all fed into its strength. The metal is now running into some resistance around key chart levels, traders said. "Technically, the 38.2 percent of the move down from the 2017 high of $1,357 comes in at $1,282," Amit Kumar Gupta, portfolio management services head at Adroit Financial Services, said. "The 100-day moving average is at $1,286. So, these levels will be watched for further moves."

Among other precious metals, palladium rose over 1

percent to its highest since February 2001 at $1,069.50 an ounce - just $5.50 an ounce from that month's peak - before edging back to $1,059.20, up 0.7 percent. Palladium is the best performer of the precious metals complex in 2017, up more than 50 percent as years of deficit and expectations for rising demand from the car industry bolstered the investment case for the autocatalyst metal. "Investors perceive the market to be very tight," INTL FCStone said in a note.

Silver was 0.5 percent higher at $16.62, having

earlier reached its highest since late November at $16.64, while

platinum was up 0.3 percent at $921.58 an ounce.

(Additional reporting by Apeksha Nair and Nallur Sethuraman in Bengaluru; Editing by Mark Potter)