PRECIOUS-Gold jumps to over 3-month peak as trade fears spur safe-haven buying

* Platinum surges over 4%; eyes best day since January 2017
* Silver jumps to more than two-week peak
* Investors raise bets on U.S. Federal Reserve rate cut

(Updates prices, adds analyst comments)
By Arijit Bose and Diti Pujara
June 3 (Reuters) - Gold climbed more than 1.5% on Monday to
its highest level in more than three months on concerns that
U.S.-Chinese trade tensions and Washington's threat of tariffs
on Mexico would hurt the global economy.
Spot gold XAU= climbed 1.4% to $1,323.62 per ounce by 2:26
p.m. EDT (1826 GMT), after rising as much as 1.6% to its highest
price since Feb. 28 at $1,325.72.
U.S. gold futures GCcv1 settled up 1.28% at $1,327.90 an
ounce.
"There are concerns still surrounding the trade wars,
whether it be surrounding the tariffs with Mexico or the tariffs
with China. There is a 'flight to safety' buying going into
metals," said Bob Haberkorn, senior market strategist at RJO
Futures.
Relations between the United States and China got another
jolt when the two nations clashed again at the Shangri-La
Dialogue in Singapore on Sunday. Mexican Foreign Minister Marcelo Ebrard said U.S. President
Donald Trump's threat of punitive tariffs on Mexico would be
devastating and would not stop waves of Central American
migrants from crossing the southern U.S. border. Equity markets bore the brunt of the two-pronged tariff
threat from the United States, while safe-haven assets such as
the Swiss franc and gold have been hefty beneficiaries.
MKTS/GLOB
Adding to woes, factory activity contracted across Asia and
Europe last month on fears of a global economic
downturn. Furthermore, U.S. manufacturing growth slowed further in May
to its weakest pace in more than two-and-a-half years, a
national purchasing managers' survey showed on Monday.
Expectations of potentially lower interest rates in the
United States, a relatively lower dollar and the volatility in
equity markets are moving capital into gold and other precious
metals broadly, said Bart Melek, head of commodity strategies at
TD Securities in Toronto. USD/
Signifying an uptick in investor sentiment toward bullion,
speculators increased their net long positions in COMEX gold in
the week to May 28, data showed. Holdings of SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, rose 0.3% to 743.21 tonnes on
Friday. GOL/ETF
Silver XAG= rose 1.5% to $14.79 per ounce. The metal
touched a more than two-week high of $14.80 earlier in the
session.
Palladium XPD= fell 0.3% to $1,321.51 per ounce, while
platinum XPT= jumped over 4 percent to $824.75 per ounce, a
two-week high. The metal was on track for its best daily gain
since early January 2017.
"On the one hand we have fears that the U.S.-China trade
dispute will continue to follow not a friendly trajectory and
potentially we could see slower growth which could mean less
industrial demand," Melek added.
"So palladium has been trading lower while platinum has been
trading higher along with gold. Gold, platinum and silver tend
to be much more of a safe haven than palladium, traditionally."