PRECIOUS-Gold inches up as prospects for slower U.S. rate hikes weigh on dollar

    * Gold trades above 200-day moving average
    * Platinum rises to highest in 2 weeks
    * Dollar index near lowest since September

 (Updates prices, revises fourth paragraph)
    By Arpan Varghese
    BENGALURU, July 17 (Reuters) - Gold prices edged up on
Monday as the U.S. dollar fell to multi-month lows after the
prospect for further interest rate hikes in the United States
this year dimmed following softer U.S. economic data last week. 
    The U.S. government reported on Friday that consumer prices
were unchanged in June and retail sales declined for a second
straight month. 
    The soft inflation and domestic demand figures undermined
arguments for the U.S. Federal Reserve to raise interest rates,
with traders cutting back their bets on the likelihood of an
increase in December.             
     The dollar huddled near a 10-month trough on Monday as
upbeat Chinese news and the prospect of only gradual policy
tightening in the U.S. sent investors piling into leveraged
positions in higher yielding currencies and risky assets. The
U.S. dollar index        edged up 0.1 percent to 95.278, having
touched its lowest since September.       
    The weaker greenback supported gold since the dollar-priced
commodity was less expensive for investors holding other
    "Investor sentiment (for gold) has improved quite
dramatically over the past week, especially with the weak data
out of the United States last week," said ANZ analyst Daniel
Hynes. "Gold is now primed for another rally."
    Spot gold        had risen 0.2 percent to $1,230.43 per
ounce at 0632 GMT. U.S. gold futures         for August delivery
climbed 0.2 percent to $1,229.50 per ounce.
    Risk sentiment among investors got an added boost after
Chinese economic data handily topped forecasts with
second-quarter gross domestic product rising 6.9 percent from a
year ago.         
    On the technical front, gold is likely to significantly
break above key resistance at the 200-day moving average near
$1,230 per ounce and could even rise to the $1,250 level in the
shorter term, Hynes said. "The technical bounce looks fairly
solid," he said.
    Spot gold  may gain further to $1,239 per ounce, as it has
cleared resistance at $1,226, according to Reuters technical
analyst Wang Tao.         
    Among other precious metals, spot silver        rose 0.5
percent to $16.02 per ounce, after hitting $16.09, the highest
in over a week, earlier in the session.
    Platinum        was up 0.8 percent at $922.80 per ounce,
after touching its highest in two weeks at $924.80    
    Palladium        edged lower by 0.1 percent to $857.50 per

 (Reporting by Arpan Varghese in Bengaluru; Editing by Biju
Dwarakanath and Joseph Radford)