LONDON, Sept 4:Gold hit a three-week high on Tuesday, helped by safe-haven buying and good physical demand, with investors awaiting the release of U.S. economic data that may set bullion’s direction.

Brighter technicals and firm oil also lifted buying. Other metals also gained, with platinum rising to a three-week high and silver rising to its highest level in more than two weeks.

Gold rose to $674.40 an ounce, the highest since August 10,and was quoted at $674.00/674.60 up from $671.80/672.40 late in London on Monday, when the US market was closed for the Labour Day holiday.

Gold remains remarkably well bid despite some dollar strength. It is playing a little bit of safe-haven role, physical demand is excellent and production is looking pretty sloppy, said David Holmes, director of precious metals sales at Dresdner Kleinwort Investment bank.

Despite high prices, producers can’t even maintain the 2,500-ton production level. So from a fundamental point of view, the market is quite good, he said, referring to annual global mine production of gold.

Gold output in South Africa, the world’s biggest producer,fell 7.5 per cent in the second quarter from a year ago, while Russia produced 76.9 tons of gold in the first seven months of 2007, 1.9 per cent lower from last year.

Traders said brisk seasonal demand from India, the world’s largest consumer, boosted physical trading in Asia and helped offset scrap sales. Gold imports to Turkey, jumped 40 per cent to 178 tons in the first eight months of the year.

The market looks strong on charts after breaking through $670. The market will watch whether gold can retain the level and rise towards the next psychological point of around $677, said Shuji Sugata, manager at Mitsubishi Corp Futures and Securities in Tokyo.

Investors awaited US data this week, including the Institute for Supply Management’s manufacturing activity in August on Tuesday, the Federal Reserve’s beige book summary of the economy’s performance on Wednesday and the monthly non-farm payrolls report on Friday.

Platinum rose as high as $1,275 an ounce and was last at$1,270/ 1,274, versus $1,264.50/ 1,271.50 in London on Monday. —Reuters