PRECIOUS-Gold vaults $1,060 as strong data dents dollar

                                
 * Dollar weakness boosts bullion price, record in sight
                                
 * AngloGold Ashanti lowers annual production target
                                
 * SPDR Gold Trust <GLD> holdings dip

                                
 (Updates prices, adds analyst comment)
                                
 By Rebekah Curtis and Veronica Brown
                                
 LONDON, Nov 2 (Reuters) - Gold prices ran above $1,060 an
ounce on Monday, closing in on last month's record high, as a
robust reading of U.S. manufacturing data boosted risk appetite
and dented the dollar -- polishing the metal's allure.
                                
 By 1600 GMT, spot gold stood at $1,061.40 per ounce <XAU=>
up 1.62 percent and bringing the record high of $1,070.40 from
October into view.
                                
 Data released earlier by the Institute for supply management
showed the U.S. manufacturing sector grew in October for the
third consecutive month and at a faster rate than was expected.
[ID:nWEN5869]
                                
 But gold had already started showing some signs of
independent strength beforehand while currency markets were
muted.
                                
 India's front-month gold future contract on the Multi
Commodity Exchange of India Ltd (MCX) struck a record high of
16,099 rupees per 10 grams, while gold priced in euros
<XAUEUR=R> also rallied strongly.
                                
 "The dollar helped today, but overall gold seems to have
some strength on its own. There's still some room on the
upside," said Alexander Zumpfe, precious metals trader at
Heraeus.
                                
 The dollar fell almost 0.4 percent against a basket of major
currencies <.DXY> and the euro was bid at $1.4821. <EUR=> [DLR/]
                                
 Last week gold registered its first weekly loss since the
week of Sept. 25, after dollar weakness had helped to spur four
consecutive weeks of gains.
                                
 Analysts were broadly upbeat on the market's chances of
eking out more gains due to expectations for more dollar
weakness.
                                
 "On a relative basis the U.S. interest rates remain very
low. Also, the Fed has been a lot more aggressive on
quantitative easing than any other central bank, which is not
good for dollar strength," said Walter de Wet, analyst at 
Standard Bank in London.
                                
 U.S. gold futures for December delivery <GCZ9> stood at
$1,059.70 an ounce, up $19.10 from Friday when the contract fell
$6.70 to $1,040.40 on the COMEX division of the New York
Mercantile Exchange.
                                
 
                                
 ANGLOGOLD LOWERS OUTPUT TARGET
                                
 AngloGold Ashanti <ANGJ.J>, the world's No.3 gold producer,
lowered its annual production target for the second straight
quarter after suspending output at a South African mine for
safety checks. [ID:nL2266048]
                                
 In a separate interview with Reuters at the London Bullion
Market Association conference, Anglo said it may accelerate
closing its hedgebook if conditions are right. [ID:nL2393287].
                                
 African miner Randgold Resources <RRS.L> and AngloGold
Ashanti said they agreed to buy an additional 20 percent in the
Moto gold project in the mineral-rich Democratic Republic of
Congo for about $113.6 million. [ID:nL2334531]
                                
 The world' largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings fell 0.915 tonnes on Friday,
making the total weekly decline to 4.575 tonnes. [GOL/SPDR]
                                
 Analysts said physical buying of gold was holding up,
supporting bullion prices.
                                
 "On the downside it seems well protected," Standard Bank's
de Wet said. "We're seeing good physical buying. When gold goes
below $1,040 there's some good interest which is supporting the
price."
                                
 In other precious metals, silver <XAG=> rose in league with
gold to trade at $16.54 from $16.27 late on Friday in New York.
Platinum was at $1,329 from $1,322.50 and palladium was at
$323.50 from $318.50.
 (Editing by Sue Thomas)