* Chinese yuan falls below 7 per dollar to 11-year low
* GRAPHIC-World FX rates in 2019: http://tmsnrt.rs/2egbfVh (Updates prices)
By K. Sathya Narayanan
Aug 5 (Reuters) - Gold surged 2% on Monday to its highest level in more than six years as a worsening U.S.-China trade conflict prompted investors to dump riskier assets for safe havens, with a weaker dollar supplying additional fuel for bullion's run.
Spot gold XAU= was up 1.7% at $1,464.72 per ounce as of 1:33 p.m. EDT (1733 GMT), after hitting its highest level since May 2013 at $1,469.60. U.S. gold futures GCcv1 settled 1.3% up at $1,476.50.
In the latest flare-up in a long-drawn trade spat, China on Friday said it would fight a decision by U.S. President Donald Trump to slap an additional 10% tariff on $300 billion worth of Chinese imports. is driving gold is fear of these tariffs and the fear of China retaliating," said Michael Matousek, head trader at U.S. Global Investors. He added that a host of uncertainties surrounding the global economy, an environment of negative bond yields and an ongoing currency war were making the case for gold.
"Gold is in a bull market and is going to trend higher. This is just a start of another wave going up. I would not be surprised to see gold hit the $1,500 level by November-December and keep it sustained there."
Trump's tariffs on China may force the U.S. Federal Reserve to cut interest rates more than it had hoped was necessary to protect the economy from trade-related risks. this volatility, growth fears, persistent weakness in economic data will be good enough for a risk-off environment," said Benjamin Lu, an analyst at Phillip Futures.
The dollar .DXY slipped to near a two-week low against key rivals, making bullion cheaper for investors holding other currencies, but rose against the Chinese yuan. Trade worries also drove a sell-off in global stock markets. USD/ MKTS/GLOB
China let its yuan CNY=CFXS weaken below the seven-per-dollar level on Monday, an 11-year low, while the offshore yuan CNH=EBS fell to its weakest since international trading of the Chinese currency began.
"This might encourage some more gold buying in China as a weaker yuan means a stronger dollar, and gold provides you exposure to the dollar, which makes gold attractive for the Chinese," Julius Baer analyst Carsten Menke said.
The Shanghai Gold Exchange said it would raise the margin requirement on its AU(T+N2) gold contract XAUTN2=SGEX . The trading limit on the contract would also be raised. India, gold imports for July plunged 55% from a year ago to the lowest level in three years as local prices jumped to a record high. holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD , rose to 830.76 tonnes on Friday. GOL/ETF
Among other metals, silver XAG= rose 1.1% to $16.39 per ounce. Platinum XPT= was up 1.4% to $854.49 per ounce, while palladium XPD= rose nearly 1.3% to $1,424.06 per ounce.
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https://tmsnrt.rs/2MGkxtA
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