* Gold on track to rally towards $1,200 - Phillip Futures
* Asian equities tumble to 3-year low, dollar retreats
(Adds ANZ analyst's comment, updates prices)
By Manolo Serapio Jr
MANILA, Aug 24 (Reuters) - Gold edged down, but stayed close
to its highest level in almost seven weeks on Monday as worries
over a slowing Chinese economy pushed investors away from risky
assets and into those deemed as safe haven.
Asian equities tumbled to three-year lows, the U.S. dollar
retreated and industrial commodities from copper to oil slid to
their weakest since 2009.
"Certainly gold is finding itself a bit of a safe-haven bid
with all the volatility that's going on in markets," said Victor
Thianpiriya, commodity strategist at ANZ Bank.
"If things do get a lot worse then gold will certainly go a
lot higher."
Spot gold XAU= was down 0.6 percent at $1,153.20 an ounce
by 0638 GMT, coming off the day's peak of $1,165.11. But
bullion's drop was shallow compared to a 3.2 percent fall in
U.S. crude and 2 percent decline in copper.
Gold rose to as much as $1,168.40 on Friday, its highest
since July 7. It gained more than 4 percent last week, the most
since mid-January.
Fears of a China-led global economic slowdown drove Wall
Street to its steepest one-day drop in nearly four years on
Friday, amid continued weakness in the Chinese manufacturing
sector and its stock markets.
Chinese stocks plummeted 9 percent on Monday, with the
Shanghai index giving up all its gains for the year on investor
disappointment that Beijing held back expected policy support at
the weekend after markets shed 11 percent last week. Japanese
equities plunged nearly 5 percent. MKTS/GLOB
"China has been the global cushion in the last decade or so
in the face of monetary easing policies from other central
banks. It was the cushion that took in all the deflationary
pressure as well as providing global growth," said Howie Lee,
analyst at Phillip Futures in Singapore.
"The fear right now is there's nothing to fall back on,"
said Lee. Gold looks on track to rally to $1,200, he said, a
level last seen in June.
Gold has now rebounded 7 percent from a 5-1/2-year low of
$1,077 reached in late July.
U.S. gold for December delivery GCcv1 slipped 0.5 percent
to $1,153.80 an ounce.
Worries over global growth have pared expectations of a U.S.
interest rate hike this year, which bodes well for gold.
"It doesn't look like the market is factoring in a rate hike
until March next year," said ANZ's Thianpiriya. "It implies
significantly more market volatility in global markets and
that's positive for gold."
Fed officials planning to lift interest rates as soon as
next month have been encouraged by solid U.S. jobs growth, but
inflation holds the key to how far the Fed can go in moving
rates away from zero. ID:nL1N10V1N7
Amid the decline in industrial commodities, spot palladium
dropped 2.1 percent to $589 an ounce. Platinum XPT= was down
0.7 percent at $1,011 and silver eased 1.4 percent to $15.09.