* EM stocks head back toward three-year high
* Chilean peso gains as metals rally
* Philippine's peso rebounds after intervention threat
* Hungary expected to keep rates steady
* China sets yuan midpoint rate at 11-month high
LONDON, Aug 22 (Reuters) - Emerging markets, one of 2017's best-performing asset classes, advanced again on Tuesday as stocks climbed back towards three-year highs and a rally in metals markets helped Chile's peso to lead gains by currencies.
MSCI's benchmark emerging stocks index gained 0.5 percent with advances in Hong Kong, China, South Africa and Hungary. It was the index's fourth rise in the past five days, reasserting its outperformance over developed market equities.
"At the moment it is the goldilocks scenario," said Crédit Agricole emerging market strategist Guillaume Tresca. "Everything seems fine, the latest macro data was quite good, political risk is declining and volatility is okay."
Tresca said investors were looking to the annual Jackson Hole conference later this week in the United States, which is hosted by the Federal Reserve Bank of Kansas City, for insights into global monetary policies.
Emerging markets have been boosted this year by a weak dollar and by low yields for benchmark U.S and European bonds, which tend to drive global borrowing costs, so this week's signals will be monitored closely.
Currency markets continued to feel the effects of a surge in metals prices. Chile, the world's top copper producer, saw its peso strengthen to its highest in more than six months against the dollar, which itself was higher.
The geopolitical tension around North Korea eased as the head of the U.S. military's Pacific Command stressed the importance of using diplomacy rather than military force to counter Pyongyang's missile threat.
In China, the yuan's official midpoint rate was set at its firmest in 11 months. Mainland Chinese stocks rose again after Shanghai posted its strongest weekly gain in four months last week .
The Philippine peso, which has fallen to an 11-year low, snapped a 10-day losing streak, as the country's central bank warned it would intervene in the currency market to curb speculation.
"The BSP will not tolerate ... speculative behaviour and stands ready to use its very ample international reserves and deploy its full policy and regulatory arsenal if necessary," Bangko Sentral ng Pilipinas Governor Nestor Espenilla said.
Indonesia was expected to keep its key interest rate at 4.75 percent, although the governor of its central bank has hinted at a potential cut "if all indicators support it". Last week, he said the bank was "pretty happy" with the inflation rate, which was 3.88 percent in July.
In emerging Europe, Hungary's central bank, which has been in stimulus mode for years, was also expected to leave its base rate unchanged, at a record-low 0.9 percent.
The Czech Republic became the first European Union country to raise rates in five years earlier this month, but Hungary is not expected to move until late next year at the earliest .
For GRAPHIC on emerging market FX performance 2017, see http://tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2017, see http://tmsnrt.rs/2dZbdP5
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see) (Reporting by Marc Jones, editing by Larry King)