June 18, 2018 / 6:00 PM / a year ago

REFILE-PRECIOUS-Gold steadies after steepest fall since November 2016

 (Refiles to update headline)
    * Worries over U.S.-China trade dispute support gold
    * Investors eye German squabble over immigration
    * U.S. dollar holds near strongest since November
    * Global stock markets fall
    * Technicals suggest gold to fall further 

    By Renita D. Young
    NEW YORK/LONDON, June 18 (Reuters) - Gold on Monday held
close to 5-1/2-month lows, with a strong dollar offsetting the
upward influence of an escalating trade dispute between the
United States and China.  
    Spot gold prices were hemmed in a tight trading range after
Friday's selloff because of competing pressure and support on
Monday, forcing investors to reassess their positions, said
Phillip Streible, senior commodities strategist at RJO Futures.
    "We saw such an excessive washout on Friday. Speculators are
reassessing their positions and consolidating for about 48 hours
until we get news to wash the market," Streible said.
    "U.S.-China trade dispute affected a whole bunch of physical
commodities ... Definitely we have a trade war going over
now...that will have a spillover on the gold market."
    Spot gold        was flat at $1,278.18 an ounce by 1:33 p.m.
EDT (1733 GMT), while U.S. gold futures         for August
delivery settled up $1.60, or 0.1 percent, at $1,280.10 per
    The stronger dollar dampens demand for gold by making it
costlier for buyers holding other currencies, while geopolitical
uncertainty fuels interest in bullion as a safe investment.
    The dollar was slightly firmer and near its strongest since
November against a basket of currencies       .       
    Gold plunged 1.8 percent on Friday, its biggest one-day fall
since November 2016, despite Washington deciding to enact
tariffs on $50 billion in Chinese goods.              
    Markets fear a trade war could damage global growth. World
stocks fell on Friday and Monday.            
    Gold would remain sensitive to trade dispute headlines and
the possibility that a showdown over immigration between German
Chancellor Angela Merkel and her conservative allies, the
Christian Social Union, could escalate, said Saxo Bank analyst
Ole Hansen. 
    "The market is also ignoring the political risks in
Germany," said analysts at Commerzbank. "A lack of consensus on
refugee policy could even cause a split in the government."
    As long as gold continued to trade below its 200-day moving
average at $1,307 prices were more likely to fall than rise,
analysts at ScotiaMocatta said. 
    Reuters technical analyst Wang Tao said gold could break
support at $1,277 an ounce and fall towards $1,258-$1,268.
    Meanwhile, silver        lost 0.4 percent at $16.45 an ounce
after falling 3.6 percent on Friday. Silver sunk to $16.39, its
lowest in almost two weeks.
    Platinum        declined 0.5 percent at $883.40 an ounce,
dropping to a four-week low, $877.65. Palladium        was down
0.2 percent at $988.30 an ounce, declining to $979.99, its
lowest since June 5.

 (Additional reporting by Karen Rodrigues in Bengaluru; editing
by Adrian Croft and Cynthia Osterman)
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