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PRECIOUS-Gold climbs above $1,320/oz ahead of Fed minutes

* Holdings of largest gold ETF hit 3-month high

* Coming up: Minutes of Fed's June meeting, 1800 GMT

* Palladium holds close to Tuesday's 13-1/2 yr peak

(Updates throughout, changes dateline, pvs SINGAPORE)

LONDON, July 9 (Reuters) - Gold prices firmed on Wednesday, climbing back above $1,320 an ounce, as fresh inflows into bullion-backed funds indicated rising investor confidence the metal ahead of the release of the latest Federal Reserve minutes.

The world's largest gold exchange-traded fund, New York-listed SPDR Gold Shares, reported a second straight session of inflows on Tuesday, taking its holdings above 800 tonnes for the first time since mid-April.

The markets waited for the release of minutes of the Federal Reserve's June meeting later in the day for clues on the outlook for Fed policy.

Two Fed officials gave a relatively downbeat assessment of the pace of U.S. growth on Tuesday. Gold tends to benefit from such a view, as it suggests that the central bank may hold off on further reining in its gold-friendly stimulus policies.

Spot gold was up 0.4 percent at $1,323.25 an ounce by 0946 GMT, while U.S. gold futures for August delivery were up $7.70 an ounce at $1,324.20.

Prices are up nearly 10 percent this year, after tumbling in 2013 on expectations that U.S. monetary policy would gradually normalize after economic data showed signs of strengthening.

"The dovish message we've been getting out of the Fed in the face of all this stronger economic data is, in our view, the main reason why gold prices are up here," Natixis analyst Nic Brown said.

"The minutes will give a more balanced perspective in terms of what everyone on the Fed thinks," he said. "If you take the average of all the different forecasts of the Fed members, they are somewhat more hawkish as a whole than Yellen is individually. If that is the message that comes through this evening, that could be unpleasant... for the gold market."

On the wider markets, the dollar was flat against the euro and a currency basket ahead of the minutes.

European shares drifted lower and world stocks fell as cooling Chinese inflation overnight added to weak European industrial data earlier in the week, pointing to slowing global growth and eclipsing a positive start to the U.S. earnings season.

PALLADIUM, PLATINUM CLIMB

Platinum and palladium prices outperformed gold and silver, with palladium holding near the previous sessions's near 13-1/2-year high.

Spot platinum was up 0.8 percent at $1,499.30 an ounce, while spot palladium was up 0.2 percent at $868.75 an ounce. On Wednesday it peaked at $873.75 an ounce, its highest since February 2001.

This month's strong car sales data has helped support a rebound in demand for the autocatalyst metal from U.S. and Chinese carmakers, analysts said, the main consumers of palladium.

"As the China Association of Automobile Manufacturers (CAAM) reported this morning, 1.56 million cars were sold in June," Commerzbank said in a note. "This brings total car sales in the first six months of the year to 9.63 million units, an 11.2 percent year-on-year increase."

Tensions between major producer Russia and the West over Ukraine this year have stoked fears that supply from the region may be constrained, while a five-month-long miners' strike in South Africa has also led analysts to tighten their forecasts for the palladium market balance.

Holdings of palladium-backed ETFs hit a record 2.573 million ounces on Tuesday after a near 8,000-ounce inflow into the NewPalladium ETF operated in Johannesburg by Absa Capital.

Spot silver was up 0.3 percent at $21.07 an ounce.

(Reporting by Jan Harvey, editing by William Hardy)