PRECIOUS-Gold hits 3-month high, platinum at strongest since September

* Gold hits highest since late March at $1,332.10/oz

Stocks rise on expectations interest rates will stay low

* Biggest gold ETF sees largest inflow since early March

(Releads, updates prices, adds comment)

By Jan Harvey

LONDON, July 1 (Reuters) - Gold hit its highest since late March on Tuesday as bets that record-low interest rates will persist buoyed stocks and on fresh signs of interest from investors in futures and bullion-backed funds. Platinum prices hit ten-month highs.

Spot gold hit a three-month high at $1,332.10 an ounce and was at $1,327.90 by 1411 GMT. U.S. gold futures for August delivery were up $5.30 an ounce at $1,327.30.

Expectations that interest rates will remain at record lows for some time yet and upbeat Chinese data lifted U.S., European and Asian stocks on Tuesday, traders said. Low interest rates tend to favor non-yielding bullion.

"Lower interest rates are for sure a supportive factor for gold, and if that idea spreads in the market, it might trigger investor invest there as well," Heraeus trader Alexander Zumpfe said. "(I) could imagine that ETF buying we already saw over the last couple of days is (also) delivering some support."

The world's largest gold exchange-traded fund, New York's SPDR Gold Shares, reported a 5.7 tonne inflow on Monday, the biggest one-day change it has reported in its holdings since March 10.

Monday's surge has taken the fund's holdings to the highest since late April at 790.7 tonnes, after they fell to their lowest since late 2008 in May at 776.9 tonnes.

"Gold's strength over the past 24 hours could partly be explained by chunky ETF buying yesterday," Swiss bank UBS said in a note on Tuesday.

"The significant change in ETF flows this year compared to last year is a key factor that is helping gold - that the aggressive ETF selling of 2013 has not made a comeback has provided ongoing support."

In addition, data from the Commodity Futures Trading Commission showed on Friday that hedge funds and money managers increased their bullish bets in gold futures and options to their highest since March after last week's strong rally in bullion prices.


Tensions in Ukraine and the Middle East also supported gold, analysts said.

Russian President Vladimir Putin said on Tuesday he and European Union states had tried unsuccessfully to persuade Kiev to extend a ceasefire in east Ukraine, and the Ukrainian president had veered off the road to peace.

"If we can hold $1,321 today and close above $1,331 I think it could open the road towards a test of $1,370," Saxo Bank's head of commodities research Ole Hansen said. "A weaker dollar, the end of the ceasefire in Ukraine, tensions in Israel and rising ETF holdings have all provided some support."

In the physical markets, however, buyers were put off by the recent price increase. In top consumer China, local prices fell to a discount of about $1 an ounce to global prices on Tuesday from being on par in the previous session, in a sign of weak demand.

Platinum group metals outperformed gold and silver, as the end of a crippling five-month strike in South African mines last week removed some event risk from the market, analysts said.

South Africa's Anglo American Platinum said on Monday it was reviewing options for its Rustenburg operations, which were hit by the strike.

Spot platinum hit its highest since September at $1,501 an ounce and was up 1.2 percent at $1,499.99 an ounce in afternoon business. Spot palladium was up 1.4 percent at $852.10 an ounce.

Silver was up 0.3 percent at $21.03 an ounce.

(Additional reporting by A. Ananthalakshmi in Singapore, editing by William Hardy and Keiron Henderson)