* Speculators cut gold, silver longs
* SPDR Gold holdings rise 0.4 pct on Friday
* Platinum turns up after tapping 7-1/2-mth low (Updates prices; adds comment, second byline, NEW YORK dateline)
By Marcy Nicholson and Eric Onstad
NEW YORK/LONDON, Oct 17 (Reuters) - The price of gold rose on Monday, partly lifted by steady flows into exchange-traded funds (ETFs) and a dip in the dollar after touching seven-month highs.
Spot gold XAU= was up 0.4 percent at $1,255.60 an ounce by 2:30 p.m. EDT (1830 GMT), having fallen nearly 0.6 percent on Friday to a one-week low of $1,247.01.
U.S. gold futures GCcv1 settled up 0.1 percent at $1,256.6 per ounce.
"Supporting the price are moderate but continuous ETF inflows since the beginning of the month. The rise so far this month is more than for all of last month," said Commerzbank (DE:CBKG) analyst Daniel Briesemann in Frankfurt.
Holdings of the largest gold-backed ETF, New York's SPDR Gold Trust GLD , rose 0.40 percent on Friday from Thursday. ETF gold holdings have gained 679,335 ounces so far this month to 57.35 million ounces, according to Reuters data HLDTOTALL=XAU .
Spot gold, which has shed about 7 percent over the past three weeks, is expected to stabilize after many speculators ditched long positions, Briesemann added.
Also supporting the price was a retreat in the dollar index .DXY from a seven-month peak touched earlier as investors evaluated whether the Federal Reserve will let inflation run above target before raising interest rates.
"It's mainly dollar weakness that's putting a little bit of a bid under the market," said Phillips Streible, senior commodities broker for RJO Futures in Chicago.
Major stock markets around the world fell, and U.S. and European bond yields slipped off four-month highs amid uncertainty over the health of the global economy. MKTS/GLOB
Federal Reserve Vice Chair Stanley Fischer said on Monday the U.S. economy may face longer and deeper recessions in the future if interest rates remain stuck at current low levels, mapping out a world in which low growth hamstrings central banks from effective recession-fighting. other precious metals, spot platinum XPT= was up 0.19 percent at $934 an ounce, after dropping to a 7-1/2-month low at $923.
Investec analyst Hunter Hillcoat said in a note that platinum prices should rise in the short-term along with gold due to a flight to safety.
"The fundamentals of both platinum and palladium markets are, however, not indicating a rapid or strong enough recovery in price during our medium-term forecast period, especially while off-market stocks can be mobilised to cover the modest market deficits we expect," he said.
Silver XAG= added 0.35 percent to $17.44, while palladium XPD= dropped 1 percent to $637, after hitting a near three-month low of $629.22 in the previous session.