* Gold down for third straight session
* Palladium, silver at multi-year lows
* U.S. durable goods orders up 2 pct in July
* Sept. interest rate hike "seems less compelling" -Dudley
(Updates prices; adds comment, second byline, NEW YORK
dateline)
By Marcy Nicholson and Clara Denina
NEW YORK/LONDON, Aug 26 (Reuters) - Gold slipped 2 percent
on Wednesday as the dollar gained and U.S. stocks advanced,
while investors kept a close eye on China's efforts to support
its economy.
Gold's losses, combined with sliding copper prices, also
hurt sentiment in the more industrial precious metals. Silver
XAG= fell 5.2 percent to $13.93 per ounce, its lowest since
August 2009. Palladium XPD= , mainly used in emissions control
systems for cars, trucks and other vehicles, fell 3.4 percent to
a five-year low of $518.00 per ounce. MET/L
"Negative sentiment in precious metals in the past two days
is due to a stronger dollar and a partial rebound in stock
markets," Commerzbank (XETRA:CBKG) analyst Carsten Fritsch said.
Wall Street advanced, while European shares and commodities
fell as investors balanced strong U.S. economic data and policy
comments with fears about China's slowing economy. MKTS/GLOB
Spot gold XAU= fell as much as 2 percent to a one-week low
of $1,117.35 an ounce, but was down 1.2 percent at $1,126.66 by
3:03 p.m. EDT (1903 GMT). It was its third straight decline from
last week's seven-week high.
U.S. gold for December delivery GCcv1 settled down 1.2
percent, at $1,124.60 an ounce.
"Gold is right now suffering from the aftermath of Monday,"
said director of research for ETF Securities in New York,
referring to Monday's near 9-percent dive in China shares that
caused world stock and commodity markets to plunge.
Global stocks have lost more than $5 trillion since China
devalued its currency on Aug. 11.
"Nothing looks particularly attractive at the moment; the
volatility in equity markets, the very low level of bond
yields," said Julian Jessop, chief global economist at Capital
Economics.
"Currencies on the other hand seem to be more driven by
perceptions of what the Fed might do on (interest) rates, while
there haven't really been major and obvious big moves in safe
havens."
In the clearest indication yet that fears of a Chinese
economic slowdown could influence U.S. monetary policy, New York
Fed President William Dudley said the prospect of a September
rate hike "seems less compelling" than it was only weeks ago.
ID:nL1N11110H
The dollar .DXY rose 0.6 percent against a basket of
leading currencies after U.S. data showed durable goods orders
gained 2 percent in July, suggesting underlying strength in the
economy that could still allow the U.S. Federal Reserve to raise
rates this year. ID:nLLAQJEBR5
Platinum XPT= was the only precious metal trading in
positive territory, having turned up 0.3 percent at $978 an
ounce.