* Fed's Dudley warns of tighter financial conditions
* Gold made biggest daily gain in two weeks on Wednesday
* Top gold ETF holdings at three-month high
* Coming up: U.S. weekly jobless claims at 1330 GMT (Updates prices throughout)
By Susan Fenton
LONDON, Feb 4 (Reuters) - Gold built on the previous day's gains on Thursday, edging to a three-month high as global economic and financial headwinds continue to present obstacles to a U.S. interest rate rise in the near term.
Commodities rallied across the board on Wednesday as the dollar tumbled after William Dudley, president of the Federal Reserve Bank of New York, said that financial conditions have tightened considerably and the weakening global outlook could have "significant consequences" for the U.S. economy. gold XAU= touched $1,147.40 an ounce, its highest since Oct. 30, before stabilising. It was up 0.2 percent at $1,145.23 by 1224 GMT, having risen 1.2 percent on Wednesday for its biggest daily gain since Jan. 20.
Dudley's comments and weaker than expected U.S. services sector data added to market expectations that the Federal Reserve is unlikely to lift rates again in March and raised doubts over the potetntial for increases later in the year.
Rising U.S. rates make a non-yielding assets such as gold less attractive.
"The (Fed funds futures) now sees only a 12 percent probability of a rate hike in March, so I am not expecting the price of gold to drop soon," Natixis analyst Bernard Dahdah said, adding that he expects the metal to trade around current levels in the next two months.
Gold has now gained nearly 8 percent since the start of the year as global economic uncertainty has led to volatility in financial markets and pushed investors towards safer assets.
Investor focus is turning to Friday's non-farm payrolls and INTL FCStone analyst Edward Meir said a weak outcome could sustain the dollar sell-off.
"If we get a stronger than expected reading, the pendulum might swing the other way, as the Fed 'hawks' recover lost ground in the debate," Meir said.
A Reuters poll forecasts U.S. non-farm payrolls will increase by 190,000 in January, after rising by 292,000 in December. ECONUS
U.S. gold for April delivery GCcv1 was up 0.5 percent at $1,146.50 an ounce.
Holdings of the top gold-backed exchange-traded fund, SPDR Gold Trust GLD , continued to rise, standing at 22.19 million ounces on Wednesday, the most since late October. GOL/ETF
Spot silver XAG= was up 0.5 percent at $14.75 an ounce, not far below Wednesday's three-month peak of $14.80.
Spot platinum XPT= rose 0.8 percent to $886.35 an ounce, having touched a one-month high of $889.87, while palladium XPD= fell 0.5 percent to $506.95 after hitiing a one-month peak of $515.54 on Wednesday.