* China PMI surveys show manufacturing weakest in years
* Rate hike may spur profit-taking in dollar and lift gold -
CMC
* Coming up: U.S. ISM manufacturing PMI at 1400 GMT
(Adds China PMI, updates prices)
By Manolo Serapio Jr
MANILA, Sept 1 (Reuters) - Gold rose on Tuesday as equities
faltered on fresh signs of weakness in China's economy although
mounting expectations that the U.S. Federal Reserve will likely
go ahead with an interest rate increase this month kept gains in
check.
Activity in China's factory sector shrank at its fastest
rate in at least three years in August as domestic and export
orders tumbled, increasing investors' fears that the world's
second-largest economy may be lurching toward a hard landing.
ID:nL4N11721X
That sent Asian stocks reeling on Tuesday, stretching
overnight losses that followed weekend comments from a key
Federal Reserve official suggesting a rate increase in September
is likely. The dollar .DXY similarly weakened as risk aversion
favored the euro and yen. MKTS/GLOB
"We are seeing some general risk-off moves in the Asian
timezone and some buying of gold would be consistent with that,"
said Ric Spooner, chief market analyst at CMC Markets in Sydney.
Spot gold XAU= was up 0.6 percent at $1,141 an ounce by
0558 GMT, after an uneventful session on Monday.
Bullion ended August 3.5 percent higher as worries over
China's slowing economy sparked safe-haven bids, although the
metal has since come off a seven-week top.
Growing indications that the Fed could lift rates at its
next policy meeting on Sept. 16-17 could limit gold's upside
potential.
Spooner said only another "fear-based" deep rout in global
equities like that seen on Aug. 24 following a slump in Chinese
stocks would "dissuade the Fed from easing."
"And I think if we did see a very strong number in the
nonfarm payrolls this week, it would certainly give them an
opportunity ... to make their move in September," he said.
But Spooner said there is a chance that the U.S. rate hike -
which would be the first since 2006 - could induce profit-taking
in the dollar and potentially buoy gold.
U.S. gold for December delivery GCcv1 rose 0.7 percent to
$1,140.90 an ounce.
MKS Group trader James Gardiner said he sees resistance for
bullion at $1,145 and then at $1,150 with immediate support
around $1,125.
Spot palladium XPD= fell 1.1 percent to $592.30 an ounce
and platinum XPT= advanced 0.2 percent to $1,008.80. Silver
XAG= edged up 0.3 percent to $14.65.