PRECIOUS-Gold hits 5-1/2 mth high on stimulus hopes, US silver rallies

* U.S. silver rises to 4-1/2 mth high of $32.38/oz
* Spot gold hits 5-1/2 mth high, U.S. gold at 5-mth peak
* Coming Up: Euro zone producer price, July; 0900 GMT

(Adds details, comments; updates prices)
By Rujun Shen
SINGAPORE, Sept 4 (Reuters) - Gold edged higher on Tuesday
to the highest level in more than five months after lacklustre
manufacturing data from around the globe fanned speculation of
imminent easing measures from central banks.
After U.S. Federal Reserve Chairman Ben Bernanke kept the
door open for more stimulus measures last week, data on Monday
showed a contraction in manufacturing activity globally and put
more pressure on policymakers to take action.
Gold and silver rode the sentiment to multi-month highs as
investors piled into the precious metals, aiming to hedge
against potential inflation risks.
The most-active U.S. silver futures contract jumped
nearly 3 percent earlier in the day to a 4-1/2 month high of
$32.38 per ounce, before easing slightly to $32.21 by 0631 GMT.
Spot silver, both a precious and an industrial metal, has
risen nearly 10 percent over the past two weeks, outstripping a
4 percent gain in gold, despite recent data suggesting gloomy
global growth outlook.
"Silver looks more at the stimulus implications of weak
data," said Nick Trevethan, senior commodity strategist at ANZ
in Singapore, adding that the strength in base metals had also
helped underpin silver.
Silver is also notorious for price volatility, given the
relatively small size of the market and limited liquidity.
The most-active Shanghai silver futures contract
struck a record high of 6,932 yuan a kilogram, playing catch-up
with global market prices.

Spot gold rose to $1,696.91 per ounce, the highest
since mid-March, then eased slightly to $1,693.84.
U.S. gold gained half a percent to $1,696.50, after
touching a 5-month top of $1,699.6 earlier in the session.
Asia's physical market saw some scrap selling as prices
approached the key $1,700 level.
"We have seen scrap flow into the market since last week,
but the quantity is not great," said a Singapore-based dealer.
"People think prices will possibly keep rising and are quite
cautious on selling at this point."
Investors, eager for more decisive action on curbing the
euro zone debt crisis, will be watching the European Central
Bank's policy meeting on Thursday and a press conference with
ECB President Mario Draghi.
U.S. non-farm payrolls data, due later in the week, will
also be a focus for the market. A weak reading may reinforce
expectations for another round of quantitative easing from the
Fed, analysts said.
Moody's Investors Service has changed its outlook on the Aaa
rating of the European Union to negative, warning it might
downgrade the bloc if it decides to cut the ratings on the EU's
four biggest budget backers: France, Germany, the Netherlands
and the United Kingdom.
Holdings of gold-backed exchange-traded funds rose to a
record high of 71.729 million ounces by the end of last week.
August recorded an inflow of 1.8 million ounces, representing a
near 3 percent rise - the biggest monthly gain since November.

Precious metals prices 0631 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1693.84 2.05 +0.12 8.32
Spot Silver 32.16 0.07 +0.22 16.14
Spot Platinum 1550.25 5.75 +0.37 11.29
Spot Palladium 633.47 6.07 +0.97 -2.92
COMEX GOLD DEC2 1696.50 8.90 +0.53 8.28 55822
COMEX SILVER DEC2 32.21 0.77 +2.44 15.39 19214
Euro/Dollar 1.2611
Dollar/Yen 78.35
COMEX gold and silver contracts show the most active months

(Editing by Himani Sarkar)