PRECIOUS-Gold, silver rise again on debt, inflation concerns

* Greece debt worry, Libya violence boost precious metals

* Rallying oil, grain prices stoke inflation concerns

* CBOE gold volatility index falls sharply for second day

* Coming up: U.S. international trade data on Wednesday (Rewrites, adds comment, updates prices)

By Frank Tang

NEW YORK, May 10 (Reuters) - Gold and silver prices rose for a third straight session on Tuesday after last week's sell-off, boosted by intense fighting in Libya, uncertainty about debt-laden Greece and the rising cost of oil and grain.

Concerns over a European debt crisis after conflicting reports on a potential aid deal for Greece and similar problems elsewhere in the euro zone underpinned prices, as did gains in crude oil on concerns that U.S. flooding could hit refineries.

Precious metals rose amid sharply higher commodity prices across the board as the sector continued to recoup last week's near-record losses. The price of silver still has more than doubled since August 2010, and gold is up 25 percent.

"From loose monetary policy to fiscal uncertainty and geopolitical unrest, those factors that have driven gold higher still exist," said Mark Luschini, chief investment strategist at broker-dealer Janney Montgomery Scott, which manages $53 billion in client assets.

"Until you see some normalization of those things, gold is going to stay higher," he said.

Spot gold gained 0.2 percent to $1,516.81 an ounce by 3:24 p.m. EDT (1924 GMT). U.S. gold futures for June delivery settled up $13.70 at $1,516.90 an ounce, after trading in a range from $1,505.20 to $1,520.

Spot silver reversed initial losses to add 1.8 percent at $38.59 an ounce, after rallying 6 percent in the previous session, its biggest one-day rise in six months. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

COLUMN-Funds' positions signal volatility [ID:nLDE74919D]

Reuters reports on commodities rout last week:

http://link.reuters.com/xer49r

Technical outlook for gold: [ID:nL3E7GA033]

Commodities performance overview:

http://r.reuters.com/nab49r

Graphic on SPDR holdings and gold prices:

http://link.reuters.com/fej49r ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Silver, hit by a succession of margin increases that nearly doubled trading costs, had its biggest correction last week -- dropping 25 percent -- since prices collapsed in 1980.

"Having taken a bigger blow than gold did in the sell-off last week, silver actually looks appealing," Luschini said.

The CBOE gold volatility index <.GVX>, a gauge of bullion investor anxiety, dropped more than 3 percent for its second consecutive fall and logged its largest two-day decline since late March.

Gold fell nearly 5 percent last week in its largest weekly slide in two years, caught in a storm of selling that battered the entire commodity complex.

The Reuters/Jefferies CRB index <.CRB>, a broad measure of commodity performance, rose more than 1 percent on Tuesday, headed for its biggest two-day gain since mid-March.

The dollar weakened against the euro after a report that Greece may receive aid totaling 60 billion euros as early as June, but the single currency pared gains after Greece denied the report. [FRX/]

Reflecting the discomfort among investors over Greek debt, gold priced in euros rose 0.1 percent to 1,055 euros an ounce, nearing four-month highs above 1,060 euros.

In the physical market, UBS said in a note that the brokerage's physical gold sales on Monday were the second-highest so far this year.

GOLD ETF HOLDINGS FALL, OIL UP

Global ETF holdings of gold have fallen to this year's lowest level, reflecting some of the investor push out of commodities in the last couple of weeks. [GOL/ETF]

However, iShares Silver Trust , the world's largest silver ETF, said its holdings gained 3 percent as of Monday after a recent decline.

Chinese trade data indicating a healthy global economy lifted crude oil and copper to a second day of gains on a continued broad recovery in commodities. [COM/WRAP]

Oil prices rose in a volatile session, supported by concerns that flooding could hit the U.S. Gulf Coast refining hub and after data showed strong Chinese crude imports for April. Supply worries amid weather concerns boosted grains markets to a third consecutive daily gain. [O/R] [GRA/]

"The worst thing that could happen in terms of the prices of commodities is oil going straight up to $150 a barrel," said James Rife, an assistant portfolio manager at Haber Trilix Advisors, which manages $2 billion in assets.

"Then you get demand destruction, and the world economy slowing down and potentially into recession again," he said.

Rife said last week's correction was better for long-term demand for crude and commodities.

Platinum group metals benefited after General Motors Co said it would invest about $2 billion in 17 U.S. plants.

Platinum climbed 0.4 percent to $1,795.99 an ounce, while palladium rose 0.7 percent to $730.72 an ounce. Prices at 3:24 p.m. EDT (1924 GMT)

LAST/ NET PCT YTD

CLOSE CHG CHG CHG US gold 1516.90 13.70 0.9% 6.7% US silver 38.486 1.370 0.0% 24.4% US platinum 1800.90 5.80 0.3% 1.3% US palladium 732.65 3.65 0.5% -8.8% Gold 1516.81 3.66 0.2% 6.9% Silver 38.59 0.70 1.8% 25.0% Platinum 1795.99 6.44 0.4% 1.6% Palladium 730.72 4.77 0.7% -8.6% Gold Fix 1513.50 -3.75 -0.2% 7.3% Silver Fix 38.40 40.00 1.1% 25.4% Platinum Fix 1793.00 5.00 0.3% 3.6% Palladium Fix 733.00 0.00 0.0% -7.3% (Additional reporting by Amanda Cooper and Jan Harvey in London; Editing by Dale Hudson, Alison Birrane and Sofina Mirza-Reid)