PRECIOUS-Gold heads for best monthly gain since Jan 2012 on rush to safety

    * Silver on track for biggest monthly increase on record
    * Dollar set for steepest monthly drop in decade
    * Interactive graphic tracking global spread of coronavirus:
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 (Updates prices)
    By Eileen Soreng
    July 31 (Reuters) - Gold rose on Friday and headed for its
biggest monthly gain in 8-1/2 years as the impact of the
worsening coronavirus pandemic on the U.S. economy hammered the
dollar, prompting investors to seek refuge in bullion. 
    Spot gold        gained 0.8% to $1,975.10 per ounce by 1207
GMT, while U.S. gold futures         rose 1.5% to $1,970.80.
    Prices hit a record $1,980.57 on Tuesday and are up nearly
11% so far this month, their biggest monthly percentage gain
since Jan. 2012.
    Silver also        climbed 3% to $24.25 per ounce, on course
for its largest monthly rise on records going back to 1982 - up
about 34% - with additional impetus from hopes for a revival in
industrial activity.                          
    "Gold is more of a store of value right now than pretty much
anything else," said Michael Hewson, chief market analyst at CMC
Markets UK.
    The dollar       , often seen by investors as a rival
safe-haven, was on track for its biggest monthly drop in almost
a decade. Its decline makes dollar-priced gold cheaper for
holders of other currencies.       
    Along with U.S. data showing the deepest economic
contraction in at least 73 years in the second quarter and a
rise in unemployment, the dollar was also hurt by President
Donald Trump raising the possibility of delaying the November
presidential election.                          
    "Optimism about a V-shaped recovery is very much at risk and
gold is seeing the benefit from that. It's quite likely that
we'll see $2,000 an ounce in fairly short order," Hewson said. 
    Gold's latest jump has taken gains for the year to 30%, also
driven by low interest rates globally amid widespread stimulus
from central banks since the metal is considered a refuge from
inflation and currency debasement.                          
    Money managers allocated $3.9 billion into gold, the second
largest weekly inflow ever, Bank of America said on Friday.
    Elsewhere, platinum        eased 0.1% to $902.28 per ounce, 
  and palladium        fell 0.8% to $2,065.87.

 (Reporting by Eileen Soreng in Bengaluru; Editing by Jan