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PRECIOUS-Gold jumps after dismal U.S. data dims rate hike prospects

* Gold rises 2 pct in best day since June 24
    * U.S. orders index misses forecast
    * Fed now seen unlikely to raise U.S. rates this month
    * Silver hits more than two-week high
    * GRAPHIC-2016 asset returns: reut.rs/1WAiOSC

 (Recasts; adds milestones, comments, updates prices; changes
dateline)
    By Devika  Krishna Kumar and Clara Denina 
    NEW YORK/LONDON, Sept 6 (Reuters) - Gold prices rose nearly
2 percent on Tuesday, the biggest percentage gain since June, as
disappointing U.S. economic data reinforced speculation in the
market that the Federal Reserve will not raise interest rates at
its September policy meeting.
    The U.S. non-manufacturing new orders index for August fell
to its lowest since December 2013. 
    Spot gold rose for a fourth straight day to a session
high of $1,351.84 an ounce, a rise of 1.9 percent - its biggest
gain since June 24. 
    Prices were up 1.73 percent at $1,349.29 per ounce by 2:20
p.m. EDT (1820 GMT). U.S. gold futures ended the session
2 percent higher at $1354.0.
    The metal hit a two-month low of $1,301.91 last Thursday on
prospects that a strong non-farm payrolls report for August
could put the Fed on track to raise rates soon. Gold bounced
back, however, when the data missed expectations. 
    "The combination of weaker economic data over the past week
has certainly turned the precious metals market to the upside,"
David Meger, director of metals trading for High Ridge Futures
in Chicago.
    "I believe this is a move that has the benefit of continuing
now that the market does not have to wrangle with the idea of a
rate hike anytime remotely soon"
    Gold is highly sensitive to rising U.S. interest rates,
which increase the opportunity cost of holding the non-yielding
asset while boosting the dollar, in which the metal is priced.
    The dollar index tumbled more than 1 percent on
Tuesday.
    New U.S. data releases and any comments from Federal Reserve
officials will be watched closely for hints as to the timing of
any rate increases. 
    Forecasting a 25-basis-point rate hike by the Fed in
December, ABN Amro analyst Georgette Boele said that modest
growth and above-growth inflation should be supportive of gold
going into 2017.
    ABN Amro on Tuesday revised its gold and silver price
forecasts for the year. 
    Spot silver touched a more than three-week high of
$20.13 an ounce.
    The path of least resistance is once again to the upside for
both gold and silver, Fawad Razaqzada, market analyst for
forex.com said.
    "The metals have started this week on the front foot and
gold is now above short-term resistance at $1,330 and silver is
above the $19.25/45 area."
    South Africa's biggest platinum mine workers' union and the
industry have failed to reach a deal on pay, the union said on
Monday, raising the prospect of industrial action in the world's
top producer of the white metal. 
    Platinum outperformed the rest of the complex, rising
as much as 3.2 percent to a near two-week high of $1,103.40 an
ounce. Palladium rose 2.7 percent to $696.72.

    
 (Additional reporting by Nallur Sethuraman in Bengaluru and Jan
Harvey in London; Editing by Susan Fenton and Andrew Hay)
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