Diamond News

* Platinum surges over 4%; eyes best day since January 2017

* Silver jumps to more than two-week peak

* Investors raise bets on U.S. Federal Reserve rate cut (Updates prices, adds analyst comments)

By Arijit Bose and Diti Pujara

June 3 (Reuters) - Gold climbed more than 1.5% on Monday to its highest level in more than three months on concerns that U.S.-Chinese trade tensions and Washington’s threat of tariffs on Mexico would hurt the global economy.

Spot gold climbed 1.4% to $1,323.62 per ounce by 2:26 p.m. EDT (1826 GMT), after rising as much as 1.6% to its highest price since Feb. 28 at $1,325.72.

U.S. gold futures settled up 1.28% at $1,327.90 an ounce.

“There are concerns still surrounding the trade wars, whether it be surrounding the tariffs with Mexico or the tariffs with China. There is a ‘flight to safety’ buying going into metals,” said Bob Haberkorn, senior market strategist at RJO Futures.

Relations between the United States and China got another jolt when the two nations clashed again at the Shangri-La Dialogue in Singapore on Sunday.

Mexican Foreign Minister Marcelo Ebrard said U.S. President Donald Trump’s threat of punitive tariffs on Mexico would be devastating and would not stop waves of Central American migrants from crossing the southern U.S. border.

Equity markets bore the brunt of the two-pronged tariff threat from the United States, while safe-haven assets such as the Swiss franc and gold have been hefty beneficiaries.

Adding to woes, factory activity contracted across Asia and Europe last month on fears of a global economic downturn.

Furthermore, U.S. manufacturing growth slowed further in May to its weakest pace...

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