By A. Ananthalakshmi
SINGAPORE (Reuters) - Silver rallied to an 11-month high on Wednesday, lifting gold for a second session and sending platinum to a fresh six-month top, as a softer dollar and optimism about the Chinese economy buoyed the white metal.
Silver and platinum group metals, which generate more demand from industry than gold, are rising on recent upbeat data from key consumer China, where a surge of new debt appeared to be fueling a recovery in factory activity, investment and household spending. Copper and steel have also rallied in recent days.
Spot silver climbed to $17.21 an ounce, its highest since May 2015, following a 4.4-percent jump on Tuesday. Platinum reached a six-month high of $1,019.90, after climbing nearly 4 percent in the previous session. Palladium hit a fresh one-month peak of $588.05.
"A weaker dollar against most major currencies influenced the price movement, however it was silver's break-out above $16.30 which spurred the precious metals," said MKS Group trader James Gardiner.
The most traded silver contract on the Shanghai Gold Exchange rose for a tenth session out of 11, climbing about 3 percent on Wednesday to a six-month top.
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Assets in silver-backed exchange traded funds are near their highest since 2014, supporting the price rally. The six silver ETFs tracked by Reuters have seen inflows of nearly 30 million ounces since the beginning of the year.
Meanwhile, gold had risen 0.2 percent to $1,253.10 an ounce by 0336 GMT, following a 1.5-percent gain in the previous session.
Supporting gold was Tuesday data that showed U.S. housing starts fell more than expected in March and permits for future home construction hit a one-year low.
That knocked the dollar lower by 0.5 percent against a basket of major currencies on Tuesday, although it ticked higher early on Wednesday.
The weak data supported market sentiment that the Fed would find it hard to raise U.S. interest rates this year after hiking the overnight rates in December for the first time in nearly a decade. Gold is sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding assets.
"Gold is looking good now as there is uncertainty over oil prices and equities. But there is big resistance at $1,260," said a trader in Hong Kong.
Asian shares pulled back from six-month highs as a rally in crude oil prices stalled.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, slid 7.43 tonnes to 805.03 tonnes on Tuesday, the biggest drop in a month. Persistent outflows could undermine the price rally.
(Reporting by A. Ananthalakshmi; Editing by Richard Pullin and Joseph Radford)