* Gold hits highest since July 17
* Palladium hits record high
* EU executive rejects Italian 2019 draft budget
(Updates throughout, adds quotes, prices, details)By Swati VermaBENGALURU, Oct 23 (Reuters) - Gold jumped 1 percent to amore than three-month peak on Tuesday, with investors spurred onby a slide in global equities and rising political and economicuncertainty, including concerns over Italy's spending plans.Palladium soared to a record high, with additional supportfrom expected renewed demand from the Chinese automotive sector. Spot gold was up 1 percent at $1,233.69 an ounce at1432 GMT, having touched its highest since July 17 at $1,239.68.U.S. gold futures rose 1 percent to $1,236.60, alsohelped by positive currency fundamentals as the dollar turnedlower . "Gold is supported by rising risk aversion washing throughthe markets and that is reflected in falling equity marketsworldwide," said Societe Generale analyst Robin Bhar."Political uncertainty in Italy, geopolitical risks in theMiddle East, Turkey and elsewhere had some safe-haven flowscoming in and extending the rally in gold prices that began acouple a weeks ago."Gold prices have gained more than 6 percent after falling inmid-August to their lowest since January 2017 at $1,159.96 anounce.
"Now we have risen above the 100-day moving average (around$1,224), which is key, so maybe we can see it rise to $1,250,which could be the next target," said Commerzbank analystCarsten Fritsch.
EARNINGS DISAPPOINTMENTSWorld shares sank towards their lowest level in a year,pressured by disappointing corporate earnings, Saudi Arabia'sdiplomatic isolation to a brewing spat over Italy's finances. The European Commission decided to reject Italy's 2019budget and asked Rome to present a new document within threeweeks. "We have a whole series of situations in connection with
Saudi Arabia and Russia, and trade tensions between U.S. andChina, and that has been having a knockdown impact on equitiesand in turn providing support to gold prices," said CapitalEconomics analyst Ross Strachan.Investor flows into bullion, often considered a safe storeof value during times of economic and political uncertainties,also continued to increase.Holdings at the world's largest gold-backed exchange-tradedfund, SPDR Gold Trust , rose 0.3 percent to 747.88 tonneson Monday. Meanwhile, palladium was up 0.2 percent at $1,124.40an ounce.Used mainly in emissions-reducing autocatalysts forvehicles, palladium has gained some 7 percent so far this yearto hit a record $1,150.50 an ounce, about $100 away from theprice of gold. A combination of factors, from tight supplies and largedeficits to resurgent interest from speculative investors, haskept the platinum group metal (PGM) on the boil.Among other precious metals, silver rose 0.8 percentto $14.73, while platinum was up 0.9 percent at $827.24. (Reporting by Swati Verma and Arpan Varghese in BengaluruEditing by David Goodman and David Holmes)