* Renewed Ukraine tensions bolster risk aversion
* Dollar index falls 0.5 pct vs basket of currencies
* Iraq's central bank says it could increase gold holdings
* Coming up: FOMC minutes for March meeting Wednesday
(Adds CME Globex ags, grains outage; updates prices)
By Frank Tang and Clara Denina
NEW YORK/LONDON, April 8 (Reuters) - Gold rose 1 percent on
Tuesday on a sharply lower dollar and as renewed tensions
between the United States and Russia over Ukraine burnished
bullion's safe-haven appeal.
The metal was also underpinned by official-sector buying
after Iraq's central bank said it might buy more gold in the
next few months, having bought 60 tonnes over the past two.
Bullion prices have sharply pulled back from a six-month
high near $1,400 an ounce in mid-March as geopolitical tensions
eased after Russia officials said the country had no intention
to invade other parts of Ukraine outside of Crimea.
On Tuesday, U.S. Secretary of State John Kerry accused
Russian agents and special forces of stirring separatist unrest
in eastern Ukraine, saying Moscow could be trying to prepare for
military action as it had in Crimea.
"The unrest in the Ukraine and the escalating rhetoric from
the U.S. is creating fear of an armed conflict, so safe-haven
demand is definitely driving up gold prices today," said Miguel
Perez-Santalla, vice president of online precious metals
exchange BullionVault.
Spot gold was up 1 percent at $1,308.75 an ounce by 3
p.m. EDT (1900 GMT), having reached a two-week high of $1,314.43
in earlier trade.
U.S. COMEX gold futures for June delivery settled
up$10.80 at $1,309.10 an ounce, with trading volume about 40
percent below its 30-day average, preliminary Reuters data
showed.
Technical issues had shut down contracts on CME Group's
Globex electronic trading system on Tuesday afternoon
with primarily agricultural and grains contracts affected and no
impact on oil or metals.
Bullion also received a boost as the dollar index
fell 0.6 percent against a basket of major currencies.
Ukraine has launched what it described as an
"anti-terrorist" operation in the eastern city of Kharkiv and
said about 70 separatists had been arrested for seizing the
regional administration building.
Gold is usually seen as an insurance against risk in times
of economic uncertainty or global political troubles.
The next market focus will be the release on Wednesday of
U.S. Federal Reserve minutes for the March FOMC meeting.
The rise in bullion comes despite subdued demand in top
buyer China, where prices have been at a discount for more than
a month. Chinese gold prices have been at a discount to spot
prices since early March, leading to lower imports.
Among other precious metals, silver rose 0.9 percent
to $19.99 an ounce, while platinum was up 1.1 percent at
$1,437.25 an ounce and palladium gained 1.7 percent to
$774.10 an ounce.
3:00 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold JUN 1309.10 10.80 0.8 1296.80 1314.70 109,847
US Silver MAY 20.057 0.150 0.8 19.850 20.175 44,884
US Plat JUL 1441.70 13.90 1.0 1427.00 1444.90 5,397
US Pall JUN 775.85 8.20 1.1 766.45 779.45 3,164
Gold 1308.80 12.76 1.0 1296.85 1314.43
Silver 19.990 0.170 0.9 19.900 20.160
Platinum 1437.25 16.25 1.1 1429.50 1442.00
Palladium 774.10 12.90 1.7 767.20 777.50
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 115,581 201,137 181,841 16.06 0.03
US Silver 75,405 48,037 58,257 22.8 1.20
US Platinum 5,451 17,032 12,496 19.42 1.12
US Palladium 3,182 5,658 5,806 29.33 0.63
(Additional reporting by A. Ananthalakshmi in Singapore;
editing by Jane Baird, David Evans, Tom Brown and Meredith
Mazzilli)
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