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PRECIOUS-Gold turns up as dollar falls from its highs

* World equities hit record high for second straight day

* Concerns over Korea, Hurricane Irma recede

* Largest gold ETF sees first inflow since Sept. 5

* GRAPHIC-2017 asset returns: http://tmsnrt.rs/2jvdmXl

(Updates prices; adds comment, byline, NEW YORK dateline) NEW YORK/LONDON, Sept 12 (Reuters) - Gold bounced up from the lowest level in more than a week on Tuesday as the dollar pared gains and U.S. President Donald Trump said U.N. sanctions on North Korea are "nothing compared to what ultimately will have to happen."

Spot gold hit its lowest since Sept. 1 at $1,322.15

an ounce in early trade and was up 0.3 percent at $1,330.68 an ounce by 2:37 p.m. EDT (1837 GMT).

U.S. gold futures settled down 0.2 percent at

$1,332.70. Gold prices turned positive after Trump said the latest U.N. sanctions on North Korea were only a very small step and nothing compared to what would have to happen to deal with the country's nuclear program. "That's pretty aggressive rhetoric on his part and that's brought gold back up," said Bob Haberkorn, senior market strategist for RJO Futures in Chicago. Gold rose to a one-year high last week, but slid 1.4 percent on Monday in its biggest one-day drop in two months as concerns eased about North Korea's nuclear ambitions and the impact of Hurricane Irma. "It was the weakness of the dollar that was really driving gold, and the tensions with North Korea," Natixis analyst Bernard Dahdah said. "The rate at which the dollar can still depreciate is slowing down."

The dollar index came off its session highs but

remained above Friday's 2-1/2-year low.

The S&P 500 and a gauge of global equity markets hit

new highs as investors opted for nominally higher-risk assets over havens such as gold and the Japanese yen. "The market is likely to turn its attention to the Fed, with speakers now in blackout mode ahead of its policy meeting next week," ANZ said in a note. The Federal Reserve has raised U.S. interest rates twice this year in response to upbeat growth data and falling unemployment, but persistently soft inflation figures have tempered expectations for another hike in December. Gold is highly sensitive to rising U.S. interest rates, as they increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced. Holdings of the world's largest gold-backed exchange-traded

fund, SPDR Gold Shares , rose 1.2 tonnes on Monday, data

from the fund showed, after three days of outflows.

Among other precious metals, silver was up 0.3

percent at $17.85 an ounce after hitting its lowest since Sept. 1 at $17.67.

Platinum was down 0.5 percent at $985.20, while palladium was 1.8 percent higher at $948.30 an ounce.

(Additional reporting by Apeksha Nair in Bengaluru; Editing by Dale Hudson and Andrea Ricci)