* Dollar gains as oil prices resume slide
* Precious metals give up early gains (Adds trader comment, updates prices)
By A. Ananthalakshmi
SINGAPORE, April 20 (Reuters) - Silver rallied to an 11-month high on Wednesday, lifting gold and other precious metals with it on optimism over the Chinese economy, but the metals later pared gains as the dollar regained ground.
Silver and platinum group metals, which see more industrial demand than gold, have been buoyed by recent upbeat data from China, where a surge of new debt appeared to be fueling a recovery in factory activity, investment and household spending. silver XAG= climbed to $17.23 an ounce, its highest since May 2015, following a 4.4-percent jump on Tuesday, but later steadied at $16.95.
Platinum XPT= reached a six-month peak of $1,019.90, while palladium XPD= hit a fresh one-month peak of $588.05, before giving up gains later in the session.
"We still remain cautious, particularly on silver given that gross longs on COMEX sit at a staggering 98 percent of their all time highs, with net positioning at 79 percent of the all-time high," said MKS Group trader Alex Thorndike.
"This screams of a rally that could run out of puff all too quickly, and experience a short and sharp capitulation."
The most traded silver contract on the Shanghai Gold Exchange XAGTD=SGEX rose for a tenth session out of 11, climbing about 3 percent on Wednesday.
Assets in silver-backed exchange traded funds are near their highest since 2014, supporting the price rally. The six silver ETFs tracked by Reuters have seen inflows of nearly 30 million ounces since the beginning of the year. HLDTOTALL=XAG
Meanwhile, gold XAU= dipped 0.1 percent to $1,253.10 an ounce by 0713 GMT after gaining earlier in the day.
U.S. dollar regained some ground against commodity currencies such as the Australian dollar as oil prices slid. The greenback rose 0.2 percent against a basket of currencies.
Crude futures fell after Kuwaiti oil workers ended a three-day strike that had cut the nation's crude output by around half, with worries about an oversupplied market returning to the fore. O/R
"Gold is looking good now as there is uncertainty over oil prices and equities. But there is big resistance at $1,260," said a trader in Hong Kong.
Holdings in SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, slid 7.43 tonnes to 805.03 tonnes on Tuesday, the biggest drop in a month. Persistent outflows could undermine the price rally.
PRICES AT 0713 GMT
Metal
Last
Change Pct chg
1248.58
-1.52
-0.12 Spot silver
16.952
0.017
0.1 Spot platinum
1005.15
-6.61
-0.65 Spot palladium
580.3
-0.2
-0.03 Comex gold
1250.8
-3.5
-0.28 Comex silver
16.975
0.003
0.02
COMEX gold and silver contracts show the most active months