CORRECTED-PRECIOUS-Gold hits 4-month peak after U.S. welcomes weaker dollar

 (Corrects to read 4-month, four months in headline, paragraph
    * U.S. dollar touches fresh 3-year low
    * Spot gold biased to rise towards $1,357.54/oz -Technicals
    * Asian stocks up 5 pct-10 pct since start of year

    By Eric Onstad
    LONDON, Jan 24 (Reuters) - Gold prices hit the highest in
more than four months on Wednesday after a U.S. official
welcomed a weaker dollar and investors sought insurance against
    The dollar index        touched fresh three-year lows after
U.S. Treasury Secretary Steven Mnuchin said a softer dollar was
good for the United States.                          
    A decline in the dollar makes commodities priced in the
greenback cheaper for buyers using other currencies.
    Spot gold        was up 0.7 percent at $1,350.43 per ounce
at 1042 GMT, while U.S. gold futures         for February
delivery climbed 1 percent to $1,349.80 per ounce.
    "It's the weaker dollar, it's the inflation focus and it's
also to some extent the market is continuing to look for a hedge
against a world that's becoming incredibly complacent with
stocks at record highs," said Ole Hansen, head of commodity
strategy at Saxo Bank in Copenhagen.
    "We're honing in on the 2017 high around $1,357, which is
going to be the next big level."
    U.S. President Donald Trump is due to speak Friday at the
World Economic Forum in Davos, Switzerland, and investors are
concerned he will use the speech to signal a more protectionist
policy stance.    
    "Global investors are also concerned about potential trade
wars... which is stirring up some risk-aversion trade, so that,
in turn, is supporting gold," said Richard Xu, a fund manager at
China's biggest gold exchange-traded fund, HuaAn Gold.
    "I think gold prices will continue to trend higher along
with other commodities, so $1,400 (an ounce) is our near-term
target," Xu said. 
    Markets also expect a U.S. interest rate hike in March. Gold
is highly sensitive to rising U.S. interest rates, as these
increase the opportunity cost of holding non-yielding bullion
while boosting the greenback.
    In other precious metals, silver        gained 1.1 percent
to $17.23 per ounce after touching a 3-1/2-week low of $16.73 in
the previous session.
    Platinum        added 0.4 percent to $1,010.50 per ounce,
while palladium        rose 0.9 percent to $1,101.47 per ounce.

 (Additional reporting by Nithin Prasad in Bengaluru, editing by
Louise Heavens)