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CORRECTED-PRECIOUS-Gold rises back above $1,360 as talk of U.S. rate hikes fades

Published 03/08/2016, 01:07 pm
Updated 03/08/2016, 01:10 pm
© Reuters. CORRECTED-PRECIOUS-Gold rises back above $1,360 as talk of U.S. rate hikes fades

(Corrects milestone in first paragraph to three-week high, from four-week high)

* Dollar wilts, European stocks sink 1 pct

* Platinum hits fresh 14-month high

* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC

By Marcy Nicholson and Jan Harvey

NEW YORK/LONDON, Aug 2 (Reuters) - Gold rose to a three-week high on Tuesday as European and U.S. shares fell and the dollar hit its lowest in over a month after last week's soft U.S. growth data dented expectations for a near-term interest rate hike.

Platinum group metals continued to shine, with platinum reaching its highest since April 2015 and palladium hitting a 14-month peak.

Spot gold XAU= was up 0.9 percent at $1,365.09 an ounce by 2:44 p.m. EDT (1844 GMT), after rising to $1,367.33, the highest since July 11.

U.S. gold futures GCv1 for December delivery settled up 1 percent at $1,372.60.

"People are concerned about interest rates in the U.S. not being hiked, about equities overheating - those concerns are getting stronger every day," ING analyst Hamza Khan said. "There's a lot of upward momentum here."

Gold is highly sensitive to U.S. interest rates, which lift the opportunity cost of holding non-yielding bullion.

Equities on Wall Street were weak while European stocks fell to two-week lows, dragged down by banks, while the euro EUR= rose above $1.12 for the first time in more than a month. FRX/ MKTS/GLOB

Dallas Federal Reserve Bank President Robert Kaplan joined other Fed policymakers by urging renewed caution in trying to lift rates again. had that poor U.S. second-quarter GDP number which came out on Friday, and that seems to have given gold a bit of a leg-up," Societe Generale (PA:SOGN) analyst Robin Bhar.

"That basically pushes back the likelihood of the next Fed rate increase, possibly now into 2017."

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares GLD saw its biggest one-day inflow since late June, on Monday, while inflows of the six silver ETFs followed by Reuters rose to a record high. GOL/ETF XPT= was up 0.9 percent at $1,167.40 an ounce, after touching a more than 15-month high of $1,177.40 earlier in the day.

Whether or not South Africa's National Union of Mineworkers will go on strike at power utility Eskom on Aug. 8, and potentially affect platinum supplies, is questionable, said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York. of the mining companies had installed significant power back-up systems to avoid the disruptions that had been suffered in the past," he said.

"But now, of course, kicks in the technical readings which are all pointing to even possible higher prices."

Palladium XPD= was up 0.5 percent at $716.35, after hitting a 13-month high of $722.90 earlier in the session. Silver XAG= was up 1.1 percent at $20.63. (Additional reporting By Nallur Sethuraman in Bengaluru; editing by William Hardy and Diane Craft)

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