PRECIOUS-Palladium hits 16-month high on economic recovery hope

* Asia's physical gold buying slows down as prices rise

* Spot palladium hits $729.72/oz

* Spot gold may rise to $1,706/oz -technicals

* Coming Up: U.S. TR/UMich consumer sentiment; 1455 GMT

(Adds details, comments; writes through; updates prices) SINGAPORE, Jan 18 (Reuters) - Palladium rose to a 16-month high on Friday and platinum hovered near a three-month high hit in the previous session, buoyed by upbeat data from the world's top two economies, as gold traded slightly higher to near a one-month high. China snapped seven quarters of slowing expansion, official data showed, while U.S. labour and housing market numbers on Thursday were also robust. The quickening pace of growth in the world's No.2 economy is likely to underpin sentiment towards platinum group metals, which have rallied strongly in the past week or so on optimism over the global outlook. "They are clearly in a sweet spot," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore. "Gold will still be supported, but the gains will be modest, while the industry-inclined precious metals will really benefit from the improved industrial demand as well as financial demand." Expectations that the U.S. Federal Reserve would continue its monetary stimulus, as well as concerns about U.S. fiscal conditions will keep gold attractive as a hedge against inflation and political turmoil. Spot palladium led the gains in the complex with a 1-percent gain, to $730.22 an ounce by 0753 GMT. It hit a 16-month high of $730.47 earlier. The metal, mainly used to produce catalyst converters for gasoline-powered vehicles that dominate U.S. and Chinese markets, was on course for a ninth straight session of gains, its longest since September. Spot platinum inched up 0.3 percent to $1,694.50, on course for a weekly gain of more than 3 percent in its third straight week of rises. It hit a three-month high of $1,701.50 in the previous session.

GOLD PHYSICAL BUYING SLOWS Strong physical buying interest from the start of the year eased as prices rebounded towards a key resistance at $1,700, dealers said. "Demand has been slowing down a fair bit," said a Singapore-based dealer, "China is very quiet and India demand has slowed, compared to the beginning of the year." Spot gold edged up 0.3 percent to $1,692.14 an ounce, heading for a weekly rise of 1.8 percent, its biggest such climb in nearly two months. It hit a one-month high of $1,695.56 on Thursday. U.S. gold was little changed at $1,694.50. Spot gold is expected to rise to $1,706 an ounce in the day, as it is riding on a wave c, said Reuters market analyst Wang Tao. Benchmark gold on the Tokyo Commodity Exchange hit a record high of 4,911 yen a gram as yen dropped to a 2-1/2-year low against the dollar.

Spot silver rose to a one-month high of $31.91, on course for a 4.7-percent weekly gain. The U.S. Mint has sold out its 2013 American Eagle silver bullion coins due to soaring demand in the first two weeks of the year.

Precious metals prices 0753 GMT

Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1692.14 4.88 +0.29 1.05 Spot Silver 31.89 0.17 +0.54 5.32 Spot Platinum 1694.50 5.51 +0.33 10.39 Spot Palladium 730.22 7.50 +1.04 5.52 COMEX GOLD FEB3 1692.40 1.60 +0.09 0.99 18538 COMEX SILVER MAR3 31.91 0.10 +0.31 5.56 4968 Euro/Dollar 1.3396 Dollar/Yen 90.05

COMEX gold and silver contracts show the most active months

(Editing by Clarence Fernandez)