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PRECIOUS-Gold eases from 3-1/2-month peak as dollar moves higher

* Fed minutes released at 2 p.m. EST

* Technicals suggest gold rally is overstretched -analyst

* Palladium drifts from record high hit on Tuesday

(Updates prices, adds analyst comments, adds NEW YORK to dateline) NEW YORK/LONDON, Jan 3 (Reuters) - Gold slid from an earlier 3-1/2-month high on Wednesday and was on track for its first day of losses in nearly three weeks as a firmer dollar pressured investments priced in the U.S. currency. The dollar's late December retreat had driven gold sharply higher, leading to fears that the metal was becoming overbought. Investors spent the morning awaiting minutes from the U.S. Federal Reserve's December policy meeting, released at 2 p.m. EST.

Spot gold was down 0.1 percent at $1,316.36 an ounce $1,321.33, while U.S. gold futures for February delivery

settled up $2.40, or 0.2 percent, at $1,318.50 per ounce. "Today, gold is down on dollar and equity strength, taking a pause from the upside we've seen in the last few sessions," said Bob Haberkorn, senior market strategist for RJO Futures in Chicago. The dollar rebounded after upbeat U.S. manufacturing and construction data, snapping a three-week losing streak.

The benchmark S&P 500 index surged past the

2,700-mark for the first time on Wednesday and other major indexes hit record intraday highs as technology stocks climbed amid indications of robust economic growth in the United States and overseas. Gold, which as a non-yielding asset is highly sensitive to rising interest rates, fell in the runup to the third U.S. interest rate rise of 2017 in December but quickly recovered, climbing 5 percent from its mid-month low to the year's close. Spot gold's 14-day relative strength index (RSI) touched 75 on Tuesday, it highest level since September 2017. An RSI above 70 indicates a commodity is overbought and could herald a price correction, technical analysts say.

Among other precious metals, palladium was down 0.6

percent at $1,085.74 an ounce after hitting a record high on Tuesday of $1,096.50. Palladium soared 56 percent in 2017 on fears that strong demand from carmakers for catalytic converters, chiefly used in gasoline-powered vehicles, would tighten the market further after years of deficit. "You have a market that is on the one hand in deficit, and on the other very well managed by some of the bigger producers, who are unwilling to ship additional units into the market," Bank of America-Merrill Lynch analyst Michael Widmer said.

Spot silver was up 0.1 percent at $17.20 an ounce

after touching a six-week high of $17.24, while platinum was 1.8 percent higher at $960.10, after touching $960.70, its highest level since Sept. 19.

(Additional reporting by Nallur Sethuraman in Bengaluru; Editing by Adrian Croft and Matthew Lewis)