By Ashitha Shivaprasad

March 1 (Reuters) – Gold rose on Wednesday as strong Chinese economic data rattled the dollar and prompted bets on more physical demand from the major bullion consumer, but higher interest rate risk. high in the United States limited profits.

* Spot gold rose 0.2% to $1,830.30 an ounce at 0921 GMT, after hitting a two-month low in the previous session. US gold futures rose 0.3% to $1,842.00.

* After rising nearly 3% in February, the dollar index fell 0.5%, making bullion cheaper for overseas buyers.

* Chinese manufacturing activity grew in February at the fastest pace in more than a decade. Physical demand for gold in the country has already rebounded this year as restrictions due to COVID-19 have been eased.

* Although traditionally seen as a hedge against inflation, raising interest rates to rein in consumer prices lessens the appetite for bullion because they earn no interest.

* In February, gold recorded its worst month since June 2021, after a series of US data indicated a resilient economy and a tight labor market, raising fears that the Federal Reserve could make further rate hikes to curb inflation.

* Traders expect the Fed’s target rate to peak at 5.425% in September, from the current range of 4.50-4.75%.

* Among other precious metals, spot silver added 0.6% to $21.04 an ounce, palladium rose 0.5% to $1,424.15 and platinum gained 0.9 % at $960.80, after hitting a more than two-week high at $966.46.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing in Spanish by Ricardo Figueroa)

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