* Chinese yuan falls below 7 per dollar to 11-year low
* GRAPHIC-World FX rates in 2019: http://tmsnrt.rs/2egbfVh(Updates prices)
By K. Sathya Narayanan
Aug 5 (Reuters) - Gold surged 2% on Monday to its highestlevel in more than six years as a worsening U.S.-China tradeconflict prompted investors to dump riskier assets for safehavens, with a weaker dollar supplying additional fuel forbullion's run.
Spot gold was up 1.7% at $1,464.72 per ounce as of1:33 p.m. EDT (1733 GMT), after hitting its highest level sinceMay 2013 at $1,469.60. U.S. gold futures settled 1.3% upat $1,476.50.
In the latest flare-up in a long-drawn trade spat, China onFriday said it would fight a decision by U.S. President DonaldTrump to slap an additional 10% tariff on $300 billion worth ofChinese imports.
"What is driving gold is fear of these tariffs and the fearof China retaliating," said Michael Matousek, head trader atU.S. Global Investors. He added that a host of uncertaintiessurrounding the global economy, an environment of negative bondyields and an ongoing currency war were making the case forgold.
"Gold is in a bull market and is going to trend higher. Thisis just a start of another wave going up. I would not besurprised to see gold hit the $1,500 level by November-Decemberand keep it sustained there."
Trump's tariffs on China may force the U.S. Federal Reserveto cut interest rates more than it had hoped was necessary toprotect the economy from trade-related risks.
"All this volatility, growth fears, persistent weakness ineconomic data will be good enough for a risk-off environment,"said Benjamin Lu, an analyst at Phillip Futures.
The dollar slipped to near a two-week low against keyrivals, making bullion cheaper for investors holding othercurrencies, but rose against the Chinese yuan. Trade worriesalso drove a sell-off in global stock markets.
China let its yuan weaken below theseven-per-dollar level on Monday, an 11-year low, while theoffshore yuan fell to its weakest since internationaltrading of the Chinese currency began.
"This might encourage some more gold buying in China as aweaker yuan means a stronger dollar, and gold provides youexposure to the dollar, which makes gold attractive for theChinese," Julius Baer analyst Carsten Menke said.
The Shanghai Gold Exchange said it would raise the marginrequirement on its AU(T+N2) gold contract. Thetrading limit on the contract would also be raised.
In India, gold imports for July plunged 55% from a year agoto the lowest level in three years as local prices jumped to arecord high.
Meanwhile, holdings in the world's largest gold-backedexchange-traded fund, SPDR Gold Trust, rose to 830.76tonnes on Friday.
Among other metals, silver rose 1.1% to $16.39 perounce. Platinum was up 1.4% to $854.49 per ounce, whilepalladium rose nearly 1.3% to $1,424.06 per ounce.
(Reporting by Diptendu Lahiri, Eileen Soreng, K. SathyaNarayanan and Arpan Varghese in Bengaluru; editing by DianeCraft)