* Struggling dollar also supporting gold
* Bullion has bounced almost 1 pct since Friday's strong US
jobs
* Goldman Sachs (NYSE:GS) keeps bearish view on gold
(Adds Goldman Sachs outlook, updates prices)
By Manolo Serapio Jr
MANILA, March 8 (Reuters) - Gold advanced to trade near a
13-month high on Tuesday, supported by a struggling dollar and
hopes the U.S. Federal Reserve will not raise interest rates as
soon as next week's meeting.
The non-interest yielding metal could test $1,300 an ounce,
more than 2 percent higher than its current level, if the Fed
stands pat at the March 15-16 policy meeting, said Daniel Ang,
analyst at Phillip Futures in Singapore.
"A lot of traders are trying to anticipate a 'no rate hike'
scenario, causing a bit of an increase in gold," said Ang. A
shaky global economy and the recent strength in the U.S. dollar,
which had curbed U.S. exports, could convince the Fed to hold
rates steady, he added.
Spot gold XAU= was up 0.2 percent at $1,269.46 an ounce by
0644 GMT, not far from Friday's peak of $1,279.60, its highest
since Feb. 3, 2015.
U.S. gold for April delivery GCcv1 gained 0.5 percent to
$1,270.50 an ounce.
The dollar has been struggling to find traction despite a
robust U.S. February employment report on Friday, its losses
extending this week as a rally in oil prices rekindled demand
for the euro and commodity-sensitive currencies. USD/
That has benefited gold along with fairly low market
expectations that the Fed will raise interest rates again next
week after lifting them for the first time in nearly a decade in
December.
Ahead of the meeting, Fed Governor Lael Brainard, who has
emerged as a leader of the Fed's dovish faction, argued for
"patience" in raising interest rates. But Fed Vice Chair Stanley
Fischer warned that inflation is showing signs of accelerating,
words that policymakers often use when signalling a preference
for raising rates.
Supporting bullion, holdings of SPDR Gold Trust GLD , the
world's largest gold-backed exchange-traded fund, dropped
slightly on Friday, but stayed near the highest since September
2014 at 25.5 million ounces. GOL/ETF
Goldman Sachs is sticking to a near-term target of $1,100
for gold, saying the rally "was driven by a lack of conviction
in divergence in U.S. growth as a weak U.S. dollar has been
highly correlated with a higher gold price."
"We believe this realignment view of weak global growth is
not supported by the U.S. data, which will likely reinforce
higher U.S. yields, a stronger U.S. dollar and the return of
divergence...," Goldman said in a report on Tuesday.
Spot silver XAG= dropped 0.6 percent to $15.55 an ounce.
Spot platinum XPT= slipped 0.4 percent to $995.20 an ounce
after hitting a four-month high overnight while palladium XPD=
fell 1.4 percent to $566.86, after peaking at $580.56 earlier,
its strongest since November.