* European stocks hit 21-month lows following Wall St slump
* Holdings in SPDR Gold Trust rise for first time since July (Adds quotes, updates prices)By Sethuraman N RBENGALURU, Oct 11 (Reuters) - Gold rose more than 1 percentto near three-week highs on Thursday, climbing above $1,200 perounce as sliding global stock markets prompted risk-waryinvestors to seek out the metal, with a weaker dollar alsosupporting prices.Spot gold gained 1.3 percent to $1,209.30 an ounce by1457 GMT, having hit its highest since Sept. 21, at $1,210.34.U.S. gold futures added 1.4 percent to $1,210 an ounce.European stocks fell in line with a slump on Wall Street,pointing to growing risk aversion across global markets. "Gold is finding a bit of support from the global sell-offseen in equities. If this (sell-off) persists, we will startseeing more of a move to gold as a safe-haven asset," INGanalyst Warren Patterson said."Rising U.S. yields and general strength in the dollar havemeant that investors have largely ignored gold. But people areseeing fairly good value at current levels on the back of somemacro concerns."
Wednesday's dive on Wall Street prompted U.S. PresidentDonald Trump to lash out against the U.S. Federal Reserve forraising interest rates.
The Fed increased rates last month for the third time thisyear and is widely expected to hike again in December.
Gold has fallen more than 12 percent since hitting a peak inApril, with investors increasingly switching to the safety ofthe greenback as the U.S.-China trade war unfolded against abackdrop of rising U.S. interest rates.But prices have managed to stay above a 1-1/2-year low of$1,059.96 hit mid-August, propped up by limited safe-havenbuying at lower levels linked to concerns over economic growthand inflationary pressure from soaring oil prices. Peter Hug, global trading director at Kitco Metals, saidthat a break above $1,208 could trigger more buying."The weakness in the dollar and to some extent the fear inthe equity carnage have spooked the shorts."Holdings in the SPDR Gold Trust , the world's largestgold-backed exchange-traded fund, rose 1.21 percent to 738.99tonnes on Wednesday, the first gain in holdings since July andthe biggest inflow since March.Spot silver rose 1.4 percent to $14.43 an ounce,while palladium was up 1.7 percent at $1,085. Platinum edged up 0.6 percent to $824.10 an ounce. (Reporting by Nallur Sethuraman and Arpan Varghese inBengaluru; Editing by Jan Harvey and Adrian Croft)
1-651-848-5832, Outside U.S. +91 8067496031); Reuters Messaging:nallur.sethuraman.thomsonreuters.com@reuters.net)) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.