* Dollar weakens as risk aversion declines * Oil ticks up $1 a barrel after 4 percent fall * Traders eye U.S. rescue plan for carmakers (Recasts, adds detail, changes dateline pvs SINGAPORE) By Jan Harvey LONDON, Dec 10 (Reuters) - Gold rose 1 percent to its highest level in almost a week on Wednesday as a weaker dollar boosted interest in the precious metal as a currency hedge and oil prices firmed. Platinum and palladium also strengthened a touch as the market awaited fresh news on a potential rescue plan for ailing U.S. automakers, which could improve the demand outlook for the metals used in catalytic converters. Spot gold rose to a session high of $786.20 an ounce, and was quoted at $784.60/786.60 an ounce at 1016 GMT, up from $775.50 an ounce late in New York on Tuesday. U.S. gold for February delivery was up $11.40 an ounce or 1.47 percent at $785.60 on the COMEX division of the New York Mercantile Exchange. "The main factor is the dollar-euro essentially, and that is clearly a lot weaker today at almost 1.30, compared to 1.26 at the end of last week," said Calyon metals analyst Robin Bhar. "With the jobs data out in the States (on Friday) we had a relatively strong dollar, and now that has gone into reverse," he said. "That is the driver (of gold)." The dollar weakened against the euro on Wednesday as a tentative U.S. plan to bail out carmakers relieved some risk aversion, which had benefited the U.S. currency. Traders sold the dollar and low-yielding yen as market volatility calmed. [ID:nLA491839] Rising crude prices, which can boost interest in commodities as an asset class and in gold as a hedge against oil-led inflation, are also supporting gold. Oil jumped more than $1 to just over $43 a barrel, as 4 percent falls overnight sparked by a downgrade to U.S. energy demand forecasts and fears of a worsening global recession prompted some light bargain hunting. [ID:nSIN422139] Traders are looking ahead to next week's meeting of oil cartel OPEC, where production cuts will be discussed. "There is speculation that further OPEC oil production cuts could lift prices," said Fairfax analyst John Meyer. EQUITIES MIXED Traders are also eyeing the equity markets, which provided strong direction to gold on Tuesday. Stocks were higher outside Europe on hopes governments would implement stimulus measures to buoy up the lagging world economy. [ID:nLA474798] European equities were weak, however, as oil stocks and banks led indices down, though Rio Tinto jumped on plans to cut jobs and spending. [ID:nLA428130] However, demand for physical gold has been lacklustre in key markets. Gold jewellery sales in Abu Dhabi fell about 20 percent in November, the emirate's industry group said, and December sales are likely to be soft as high prices discourage buyers. [ID:nLA478132] Platinum prices were a touch firmer on Wednesday, as traders eyed a $15 billion U.S. plan to bail out ailing carmakers, whose woes have knocked the metal lower in recent months. The U.S. House of Representatives could vote as early as Wednesday on a plan to restructure carmakers but the project could still be blocked by the Senate, officials said. [ID:nN09294627] Lawmakers fear that a collapse of any of the Big Three automakers -- General Motors , Chrysler or Ford -- could deepen the U.S. recession. But while talk of the bailout has helped arrest the metal's sharp slide -- platinum has shed more than 65 percent of its value since its March peak -- it may not push it higher. "While we expect the metal to benefit from further bargain hunting in the coming sessions, strong resistance is anticipated around $882-88," said James Moore, an analyst at TheBullionDesk.com. Spot platinum was quoted at $815/835 an ounce, against $803.50, while sister metal palladium was steady at $174/182 an ounce against $174. Among other precious metals, spot silver rose to $9.97/10.05 an ounce from $9.79. (Reporting by Jan Harvey; editing by Karen Foster)

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