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PRECIOUS-Gold crawls up as dollar retreats

Oct 4 (Reuters) - Gold inched up on Wednesday after hitting a 7-week low in the previous session, as the dollar pulled back from a 1-1/2-month high against a basket of currencies.

FUNDAMENTALS

* Spot gold had risen 0.3 percent to $1,275.10 an ounce by 0049 GMT. It touched its lowest since mid-August at $1,267.76 on Tuesday.

* U.S. gold futures for December delivery were also up 0.3 percent at $1,278 per ounce.

* The dollar on Wednesday shed 0.2 percent against a basket

of major currencies after touching its best since

mid-August on Tuesday

* The three major U.S. stock indexes and the Russell 2000 posted record high closes for the second straight day on Tuesday, helped by gains in airlines and as carmakers rose after strong September vehicle sales. Major automakers on Tuesday posted higher U.S. new vehicle sales in September as consumers in hurricane-hit parts of the country replaced flood-damaged cars, extending a rally in their shares that began when Hurricane Harvey hit southeast Texas in late August.

* Britain wants to negotiate a Brexit agreement with the European Union, but is ready to walk away with no deal, Brexit minister David Davis said on Tuesday, warning that any error in the talks could cost them billions of pounds.

* The European Central Bank bought fewer German bonds than it should have for a sixth straight month in September, a sign that it may be saving ammunition for an extension of its stimulus program well into next year.

* Japanese companies' inflation expectations eased slightly in September from three months ago in a worrying sign the economy continues to struggle with a deflationary mindset.

* The Perth Mint's sales of gold products doubled in September from a month earlier, while silver sales surged 78 percent, the mint said in a blog post on its website on Tuesday.

DATA/EVENT AHEAD (GMT)

0750 France Markit services PMI Sep 0755 Germany Markit services PMI Sep 0800 Euro zone Markit services PMI final Sep 0900 Euro zone Retail sales Aug 1215 U.S. ADP national employment Sep 1400 U.S. ISM non-manufacturing PMI Sep

1915 Federal Reserve Chair Janet Yellen gives brief welcome remarks at banking event in St. Louis

(Reporting by Apeksha Nair in Bengaluru; Editing by Sonali Paul)