PRECIOUS-Gold inches higher, eyes best month in three years

* Silver on track for best month since June 2016
* Platinum set to post biggest monthly gain since January
2018
* Palladium on track for second straight monthly decline

(Adds comments, updates prices)
By K. Sathya Narayanan
Aug 30 (Reuters) - Gold erased early losses to trade
slightly higher on Friday and was headed for its biggest monthly
gain in over three years as concerns about a slowdown in global
growth and hopes for rate cuts by central banks worldwide
boosted safe-haven bids.
Spot gold XAU= had gained 0.2% to $1,530.60 per ounce by
0637 GMT and was set for a more than 8% gain for the month, its
biggest since June 2016.
U.S. gold futures GCv1 were up 0.3% at $1,540.80.
"This is only a technical bounce. People have really
considered that bullion is a safe-haven... And are using every
dip as buying opportunity," said Vandana Bharti, assistant
vice-president of commodity research at SMC Comtrade.
Gold slipped as much as 0.4% earlier in the session after a
near 1% drop in the previous session, as positive developments
around the Sino-U.S. trade negotiations rekindled investor
appetite for riskier assets.
U.S. Treasury yields rose on Thursday, with 30-year yields
climbing from record lows, while Asian equities jumped to a
one-week high on Friday. US/ MKTS/GLOB
"Last night's (Sino-U.S.) trade war news resulted in gains
in stock markets... We saw yields climb very marginally in bond
markets overnights, and that prompted a little bit of a flurry
of risk taking and a selloff in gold," said IG Markets analyst
Kyle Rodda.
U.S. President Donald Trump said some trade discussions were
taking place on Thursday, with more talks scheduled.
China's commerce ministry said a September round of meetings
was being discussed by the two sides, but added that it was
important for Washington to cancel a tariff increase.
"Gold prices remain pretty well supported because the risks
in the trade war haven't changed and the outlook on the global
economy hasn't changed pretty much. That means there are still
bets on major interest rate cuts from global central banks,"
Rodda added.
Federal funds futures FEDWATCH implied traders saw a 96%
chance of a 25 basis-point rate cut by the U.S. central bank
next month.
Spot silver XAG= gained 0.8% to $18.39 per ounce, after
matching a high last seen in April 2017 on Thursday. It was set
to post its biggest monthly gain since June 2016.
Platinum XPT= rose 1% to $925 an ounce, after touching its
highest since April 2018 in the previous session. It was up over
7% so far this month, en route its biggest monthly gain since
January 2018.
Palladium XPD= gained 0.9% to $1,487.15 per ounce, but was
set for a second straight monthly decline.