PRECIOUS-Gold set for biggest monthly gain since November

                                
 * Gold up as dollar hits 3-year low, data inflationary
                                
 * Dollar key driver to strength in gold and silver
                                
 * Silver extends gains after Thursday's record high
                                
 * Coming Up: U.S. construction spending on Monday
                                
 (Recasts, adds comment, updates market activity, changes
byline, dateline, previously LONDON)
                                
 By Frank Tang
                                
 NEW YORK, April 29 (Reuters) - Gold rose to a third
consecutive record high on Friday, closing in on $1,550 an
ounce as the dollar fell to a three-year low on expectations
the U.S. Federal Reserve will maintain easy money policy.
                                
 Silver rose toward the previous session's record high near
$50 an ounce, which had eclipsed the Hunt Brothers peak reached
three decades ago. The metal is set for a near 30 percent rise
in April, its biggest monthly gain since April 1987.
                                
 Precious metals rose further after data showed U.S.
consumer spending rose in March as households stretched to
cover higher costs for food and gasoline, with inflation
posting its biggest year-on-year rise in 10 months.
[ID:nN29101956]
                                
 "Gold is showing a text-book bull market behavior, a steady
ascent without major spikes. It's the continuation of the same
theme, as the Fed's posture seems to be fairly dovish still,"
said James Dailey, portfolio manager of the TEAM Asset Strategy
Fund.
                                
 Spot gold <XAU=> was last up 0.6 percent at $1,543.79 an
ounce by 11:31 a.m. EDT (1531 GMT), on course for an 8 percent
monthly gain, its strongest since November. Bullion was also
set for its seventh consecutive weekly rise, its longest
winning streak since 2007.
                                
 U.S. June futures <GCM1> rose 0.9 percent to $1,544.30 an
ounce, with trading volumes restricted by a public holiday in
London.
                                
 Investors look forward to next Friday's nonfarm payrolls
data for trading cues, after data this week painted a picture
of an economy with slower growth and higher inflation, and
after the Federal Reserve signaled it would not tighten
monetary policy any time soon.
                                
 SILVER HOLDS FIRM
                                
 Meanwhile silver <XAG=> hovered close to its record high,
having gained 4 percent this week, although analysts say its
robust performance against the other precious metals may not be
sustainable.
                                
 "If silver doesn't make a new high and sustain above that,
it may go through a more vicious correction here. So, gold in
the short term could go down in sympathy of that," Dailey
said.
                                
 Silver <XAG=> was last up 0.2 percent at $48.41 an ounce,
profiting also from the softness in the dollar, which fell as
much as 0.4 percent to a three-year low against a basket of
currencies. [FRX/]
                                
 "If the dollar continues to weaken, then it's only likely
to boost gold as well as silver as the inverse relationship
between the two assets persists. I would say that for gold, I
am still looking for it to hit $1,600 this year," said Ong Yi
Ling, investment analyst at Phillip Futures in Singapore.
                                
 "In the long term, I think, if we see silver prices at such
a high level, then it could hurt the industrial demand."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 For a 24-hour gold technical outlook:
                                
 http://graphics.thomsonreuters.com/WT1/20112904085247.jpg
                                
 For a graphic on silver as best-performing commodity:
                                
 http://r.reuters.com/duj88r
                                
 For SPDR, iShares holdings:                     [GOL/ETF]
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 "There's some selling but I would say it's very light,"
said a dealer in Singapore, who trades gold and silver. "It had
been a very busy week, and I am glad today is Friday. It's all
quiet, finally."
                                
 The CME Group Inc <CME.O>, parent of the Chicago Board of
Trade, said on Thursday it would raise maintenance margins for
COMEX 5000 Silver <0#SI:> futures by 13.2 percent, making it
more expensive for silver speculators to trade in.
[ID:nL3E7FS62K]
                                
 For platinum group metals, platinum <XPT=> echoed the
strength in gold and silver, rising 0.6 percent on the day to
$1,847 an ounce, while palladium <XPD=> rose 1.5 percent to
$782.47.
Prices at 11:31 a.m. EDT (1531 GMT)                           
                                
                           LAST      NET    PCT     YTD
                                
                                     CHG    CHG     CHG
US gold         <GCM1>     1544.30    13.10   0.9%    8.7%
US silver       <SIK1>      48.515    0.995   2.1%   56.8%
US platinum     <PLN1>     1852.40    12.50   0.7%    4.2%
US palladium    <PAM1>      786.55    10.80   1.5%   -2.1%
Gold            <XAU=>     1543.79     8.84   0.6%    8.8%
Silver          <XAG=>       48.51     0.10   0.2%   57.2%
Platinum        <XPT=>     1847.00    11.90   0.6%    4.5%
Palladium       <XPD=>      782.47    11.24   1.5%   -2.1%
Gold Fix        <XAUFIX=>  1535.50     4.50   0.3%    8.9%
Silver Fix      <XAGFIX=>    48.70   340.00   7.5%   59.0%
Platinum Fix    <XPTFIX=>  1835.00    15.00   0.8%    6.0%
Palladium Fix   <XPDFIX=>   777.00     8.00   1.0%   -1.8%
 (Editing by Marguerita Choy)