* Weaker China yuan may keep Fed from raising rates in Sept
* Coming up: U.S. NAHB housing market index at 1400 GMT
(Updates prices)
By Manolo Serapio Jr
MANILA, Aug 17 (Reuters) - Gold edged higher on Monday as
concerns persisted over a weaker yuan after China devalued its
currency last week, with the uncertainty likely to burnish
bullion's safe-haven appeal.
The weaker yuan could still prompt the U.S. Federal Reserve
not to raise interest rates as soon as next month, as many had
expected previously, despite continued signals of a
strengthening U.S. economy.
"The repercussions of China's move are more deep seated than
it appears and over the course of the next few weeks, gold
should remain elevated on growing concerns about the state of
China's health," said Howie Lee, analyst at Phillip Futures in
Singapore.
Spot gold XAU= was up 0.4 percent at $1,117.80 an ounce by
0600 GMT. The metal touched a three-week peak of $1,126.31 on
Thursday, helping it end a seven-week losing run.
U.S. gold for December delivery GCcv1 rose 0.4 percent to
$1,117.30 an ounce.
China's devaluation of its yuan last week helped gold
recover some lost ground, pulling it up from a 5-1/2-year low of
$1,077 reached during a late-July rout.
Lee said there is a chance gold could rise as far as $1,150
if the Fed does not raise interest rates at its next policy
meeting in September.
"We're not sure anymore whether (Fed Chair Janet) Yellen
will be comfortable raising interest rates in September with
what China has done. (China) is exporting deflation and she may
not be too comfortable with it at this point," said Lee, who
rates the probability of a rate hike next month at 50-50 against
60-40 earlier.
Minutes from the Fed's July 28-29 meeting due on Wednesday
will offer vital clues about its plan to hike rates for the
first time since 2006. Rebounding retail sales, solid jobs
growth and rising construction all point to next month as gross
domestic product stays above trend for the world's largest
economy. ID:nL5N10P2UU
Mizuho Bank senior economist Vishnu Varathan said the Fed
minutes may "re-sensitize markets to U.S. data and solid prints
may ignite firmer U.S. dollar and knock-on softer yuan fix." A
stronger dollar could weigh on gold.
Spot silver XAG= gained 0.4 percent to $15.27 an ounce
after scaling a one-month high of $15.61 on Friday. Platinum
XPT= rose 0.7 percent to $996.20 an ounce and palladium XPD
added 0.3 percent to $617.28.