* U.S. home sales, manufacturing stumble
* Dollar eases off 2-year peak
* U.S. 10-year Treasury yields hit lowest since Dec 2017
* Platinum slumps to 3-month low (Adds comments, updates prices)
By K. Sathya Narayanan
May 23 (Reuters) - Gold prices jumped 1% on Thursday as the U.S. dollar pulled back from a two-year peak scaled earlier in the session, and global equities and U.S. Treasury yields slid on escalating U.S.-China trade tensions.
Spot gold climbed 0.9% to $1,284.78 per ounce by 2:58 pm EDT (1858 GMT), after rising as much as 1.1% to a one-week peak of 1,287.23.
U.S. gold futures for June settled up 0.9% at 1,285.40.
“We have seen a sharp reversal in the dollar and that has helped buoy gold prices,” said Suki Cooper, precious metals analyst at Standard Chartered Bank.
The dollar index, which earlier touched its highest level since May 2017 at 98.371, turned negative after data showed manufacturing activity hit its lowest level in almost a decade in May.
The dollar was last down 0.2% against key rivals, making gold cheaper for holders of other currencies.
Sales of new U.S. single-family homes also fell from a near 11-1/2-year high in April. Slowing growth supports the U.S. central bank’s recent decision to suspend its three-year campaign to hike interest rates.
“After the U.S. Federal Reserve said it would remain patient the market has taken this as a positive cue and has started to price in the greater probability of a rate cut,” Cooper added.
Lower interest rates tend to lift gold as it reduces the opportunity cost of holding the non-yielding bullion.
Fed officials at their last meeting agreed that their patient approach to setting monetary policy could remain in place “for some time,” Fed minutes showed on Wednesday.
“Yields are (also) a bit lower and equity markets are down (supporting gold),” said ABN AMRO analyst Georgette Boele.
U.S. 10-year Treasury yields dropped to the lowest since December 2017 as equities around the world took a nosedive on concerns about the U.S.-China trade spat.
China said the United States needs to correct its “wrong actions” for trade talks to continue after it blacklisted Chinese technology company Huawei Technologies Co Ltd.
“The political uncertainties are helping gold, especially Brexit. Investors are seeing turmoil everywhere and that is waking up the asset allocators to gold as another haven besides dollar,” said George Gero, managing director at RBC Wealth Management.
“It’s interesting to see gold living with dollar near 98.”
Among other precious metals, silver gaining 1.1% to $14.60 per ounce, and palladium edged 0.3% lower to $1,310.01.
Platinum fell 0.6% to $794.00 an ounce, having touched its lowest since Feb. 15 at $791 earlier in the session. (Reporting by K. Sathya Narayanan and Brijesh Patel in Bengaluru Editing by Chris Reese)