PRECIOUS-Gold hits 2-week high on growth fears, palladium scales new peak

* Palladium surges to record at $1,664.50/oz
* Gold could climb further to $1,550 -analyst
* Silver jumps more than 3%
* French, German and euro zone PMIs weaker-than-expected

(Updates prices)
By Sumita Layek
Sept 23 (Reuters) - Gold rose on Monday to its highest in
over two weeks as weak economic data from the euro zone stoked
global recession fears and forced investors to seek refuge in
bullion, while palladium soared to a record on a sustained
supply shortfall.
Spot gold XAU= gained 0.5% at $1,523.51 per ounce as of
1:37 p.m. EDT (1737 GMT), after hitting $1,526.80, its highest
since Sept. 6.
U.S. gold futures GCcv1 settled up 1.1% at $1,531.50 an
ounce.
"The weak German PMI numbers gave a little bit of a shock to
the stock market and led investors into safety like gold and
silver," said Phillip Streible, senior commodities strategist at
RJO Futures.
Gold could hit $1,550 in this supportive environment of
"weak interest rates, increasing geopolitical risks, no (trade)
agreement with China and weak data that shows we are slipping
into recession," Streible added.
German private sector activity shrank for the first time in
6-1/2 years in September as a manufacturing recession deepened
unexpectedly and growth in the service sector lost momentum,
while euro zone business growth stalled, a survey showed on
Monday. Meanwhile, better-than-expected U.S. manufacturing PMI data
helped stock markets pare some losses, but failed to dent gold's
upward momentum. Investors are also keeping a close eye on U.S.-China trade
ties, after a Chinese agriculture delegation cancelled their
visit to U.S. farm states, adding to the uncertainty in the
drawn-out dispute that has weighed on the global
economy. Adding to geopolitical tensions, U.S. President Donald Trump
on Friday approved sending American troops to bolster Saudi
Arabia's air and missile defenses after the largest-ever attack
on the kingdom's oil facilities. Meanwhile, palladium prices rose 0.6% to $1,650.60 an
ounce, having soared to a record high of $1,664.50 earlier. The
autocatalyst metal has risen nearly 8%, or about $115, so far
this month.
"People are starting to realize that auto sales and
production outside of China is actually not so bad and so demand
from the industrial sector is stronger that what people
thought," said Jeffrey Christian, managing partner of CPM Group.
"In addition to that, there are a lot of investors moving in
that market and in such a small, illiquid market, it doesn't
take a lot of investors to drive the price higher."
Silver XAG= jumped 3.5% to $18.61 per ounce and platinum
XPT= rose 1.1% to $955.85.