PRECIOUS-Gold rises as safe-haven bid resurfaces

                                
 * Gold firms, silver near highest since early 2008
                                
 * Safe-haven factor underpins precious complex
                                
 * Coming Up: U.S. Retail sales mm; 1230 GMT Aug
                                
 
                                
 (Updates with comment, refreshes prices; changes dateline
from SINGAPORE)
                                
 By Amanda Cooper
                                
 LONDON, Sept 14 (Reuters) - Gold was set for its largest
one-day rise this month on Tuesday, in line with a pickup in
other safe-haven assets as the U.S. dollar fell broadly, while
silver nudged at two-year highs.
                                
 Palladium, used predominantly in autocatalysts, struck
four-month highs as a combination of fund buying and growing
prospects for industrial demand lifted prices.
                                
 Spot gold <XAU=> was at $1,254.05 an ounce by 0855 GMT, up
from $1,245.25 the day before. U.S. gold futures for December
delivery <GCZ0> were last up $8.60 an ounce at $1,255.0.
                                
 "All four precious metals are really keeping a very close
eye on the U.S. dollar right now and if the dollar doesn't
'shape up,' as such, this safe-haven buying will continue in the
precious metals," said Afshin Nabavi, head of trading at MKS
Finance.
                                
 A raft of economic data from both the euro zone and the
United States later in the day should offer further proof of the
health of both regions and will be particularly important in
whetting investor appetite for gold.
                                
 "People will be looking at that for some direction, but
overall, I would say given the economic situation in the U.S. as
well as ongoing geopolitical tensions we are pretty much on our
way towards breaking $1,265 and thereafter, up to $1,300,"
Nabavi said.
                                
 
                                
 SENTIMENT
                                
 The euro slid against the dollar <EUR=> after an indicator
of German economic sentiment fell unexpectedly in September,
according to the ZEW institute, which releases the survey.
                                
 ZEW said the decline may not indicate a temporary slowdown,
but rather a flattening in economic activity. [ID:nDEP003349]
                                
 The dollar extended losses on Tuesday to hit 15-year lows
against the Japanese yen and plumbed nine-month lows against the
Swiss franc, another key safe-haven asset, while euro zone
government bond yields also declined. [FRX/] [GVD/EUR]
                                
 Gold is on track for a near-14 percent rise this year,
fuelled primarily by investors seeking an alternative to
volatile currencies, equities and some sovereign bonds as
economic data has cast doubt on the global growth outlook.
                                
 Although the price remains within 0.8 percent of late June's
record-highs, the market is now in the full throes of the buying
season in some of the world's biggest consumers.
                                
 "Physical demand is picking up, mostly in India and China,
as people are trying to finish their Christmas orders," said
Dick Poon, manager at Heraeus in Hong Kong. "It's already
September."
                                
 Singapore dealers said Thai buyers were active, while
Indonesian consumers were still on holiday. <GOLD/ASIA1>
                                
 Holdings of gold in the world's largest exchange-traded
fund, the SPDR Gold Trust <GLD.P>, dropped to 1,292.619 tonnes
by Sept. 13 from 1,293.531 tonnes by Sept. 10. [GOL/SPDR]
                                
 Adding further support to gold was a decline on the equities
markets, where major European indexes tilted into negative
territory. [.EU]
                                
 Across the rest of the precious metals complex, silver
traded at its highest in 2-1/2 years, helped by robust Chinese
industrial output and firm base metals, although the safe-haven
effect boosting gold was also a driving force. [MET/L]
                                
 "Silver has been extremely volatile, especially around these
numbers," said MKS's Nabavi. "In essence, it's really a cheap
way of getting into the precious metals world without paying
$1,250-odd an ounce."
                                
 Spot silver <XAG=> was last at $20.32 an ounce, up from
$20.02 the day before and on course for its third consecutive
day of gains.
                                
 In the platinum group metals, palladium <XPD=> hit its
highest in four months, trading above $540 an ounce.
                                
 "We're getting better noises coming out of the euro zone
about projected growth and industry and obviously, palladium is
quite tightly linked to industry," one European trader said.
                                
 Palladium, which is predominantly used in the production of
auto catalysts, is on track for a 33 percent increase this year
and is one of the top performers of the entire commodities
complex.
                                
 Palladium was last at $542.00, up from $524.95 on Monday,
while sister metal platinum <XPT=> was last quoted at $1,570.50
an ounce, up from $1,543.65 the day before.
 (Additional reporting by Lewa Pardomuan in Singapore; editing
by Sue Thomas)