Gold on track to rally towards $1,200 - Reuters

LONDON, Aug 24 (Reuters) - Gold edged lower on Monday but remained near a seven-week high as the dollar and shares tumbled on concerns about the Chinese economy and uncertainty over the timing of a U.S. rate rise.

The dip was partly due to heavy losses in the rest of the commodities sector, with crude oildown almost 4 percent and copper falling to a six-year low. Platinum dropped 3 percent and palladium hit its lowest in three years at $564 an ounce.

Spot gold was down 0.2 percent at $1,158.51 an ounce by 1145 GMT, with investors taking profits after the metal hit its highest since July 7 at $1,168.40 on Friday. It gained more than 4 percent last week, the most since mid-January.

"Gold is holding on to some of the gains it made last week and that speaks to the difficulty in the global equity market right now," Mitsubishi Corp strategist Jonathan Butler said.

Gold has now rebounded 7 percent from a 5-1/2-year low of $1,077 reached in late July, benefiting from uncertainty posed by China's surprise devaluation of its yuan currency and the move's impact on the dollar.

The U.S. currency fell to its lowest in two months against a basket of currencies, down 1.1 percent, as more investors priced out chances of a rate increase in September.