Aussie hits year high as weak US$, firm gold buoy

* Aussie hits 1-year peak as weak US$, firm gold lift

* Pulls back slightly after weak local retail sales data

* Lesser chance of a rate hike seen in Oct, Nov

SYDNEY, Sept 9 - The Australian dollar climbed to a one-year high on Wednesday, boosted by firm gold and commodity prices and a slumping U.S. dollar.

The favourable factors eclipsed a surprising drop in retail sales in Australia in July, which some saw as dimming the chance of an interest rate hike in October and even November.

The Aussie rose to as far as $0.8662, dipping slightly to $0.8584 after the data and then steadying around $0.8595, a good 3.5 U.S. cents from last week's low.

"Gold prices are hovering around $1,000 and people are still concerned about U.S. dollar weakness. That's why the Aussie is still hanging in there," said David Scutt, a dealer at Arab Bank Australia.

It fell to 79.47 yen from a 3-1/2-week high of 79.99 yen earlier in the day, but is still up around 3 yen from last week's low 76.37.

The U.S. dollar index hit a one-year low on Wednesday as sentiment towards it took a knock after the United Nations called for a new world reserve using several currencies.

However, gold and commodities, which are priced in the U.S. dollar, benefitted from the weaker U.S. currency. That boosted the Aussie, a favourite commodity currency.

Australia is a key seller of commodities such as iron ore and is the world's third-biggest exporter of gold.

So firm was demand for the Aussie that a 1 percent fall in retail sales in July, against forecasts for a 0.5 percent rise, did not much hinder its progress.

The data lifted bond and bill futures and pulled swap rates lower as investors saw less chance of a 25-basis-point rate hike in October. Bets for a November move wavered as well. Local rates stand at a record low of 3 percent now.

"Today's data makes it very unlikely we'll see a rate hike in October. I still think December is the most likely timing," said Adam Carr, analyst at ICAP.

He said the Reserve Bank of Australia will probably want more time to assess the economy before raising rates.

November interbank futures rose 0.04 points to 96.755, giving a one-month implied rate of 3.245 percent, compared to an implied rate of 3.305 percent seen just on Monday.

December bill futures jumped 0.11 points to 96.14, while the three-year bond futures added 0.065 points to 95.15. Ten-year futures rose 0.035 points to 94.62.

One-year overnight index rate swaps fell to 3.9075 percent, from Tuesday's 4.06 percent. One-year interest rate swaps slipped to 4.1475 percent, from a high of 4.3075 seen on Monday.