July 6, 2018 / 11:02 AM / 14 days ago

PRECIOUS-Gold down but off session lows as dollar weakens

    * Spot gold up 0.2 percent for the week
    * Tariffs on $34 bln of Chinese goods kick in 
    * U.S. jobs data weighs on dollar 

 (Updates prices, headline; adds comment, byline, NEW YORK to
dateline)
    By Renita D. Young and Maytaal Angel
    NEW YORK/LONDON, July 6 (Reuters) - Gold fell on Friday, but
bounced off session lows as the dollar weakened and equities
rose, yet bullion was on track for a small weekly gain amid
escalating U.S.-Sino trade tensions.
    The dollar fell after data showed the U.S. unemployment rate
increased and wages grew less than forecast in June even as the
economy created more jobs than expected. Wage growth is a
closely watched signal of potential inflation that could prompt
more interest rate hikes by the Federal Reserve.       
    A weak dollar tends to lift gold, making the
greenback-priced metal cheaper for non-U.S. investors.
    U.S. tariffs on $34 billion worth of Chinese goods took
effect on Friday, while China's commerce ministry retaliated
with 25 percent tariffs on $34 billion worth of U.S. imports.
    The markets absorbed imposition of the tariffs calmly, with
stocks edging higher. Rising stock markets pressure gold prices
by reducing safe-haven demand for the precious metal.
           
    "The tariffs were already priced in," said RJO Futures' Josh
Graves. "Gold  needs more than a trade war to push it higher. It
needs volatility in equities, weaker economic data, a dovish
Fed."
    Spot gold        was down 0.2 percent at $1,254.45 oz by
1:35 p.m. EDT (1735 GMT), off the session low of $1,252.15 and
headed for its first weekly gain in four weeks.
    U.S. gold futures         for August delivery settled down
$3, or 0.2 percent, at $1,255.80 per ounce. 
    "Gold needs to see closes above $1,275-$1,280 before it
finds any support," Graves said.
    On Thursday, minutes of the Federal Reserve's June 12-13
policy meeting showed that U.S. central bankers expressed
concerns global trade tensions could hit an economy perceived as
strong.             
    "Traders are extremely cautious when it comes to gold. The
intraday price-action has a bullish set-up and shows that the
price has potential to test the level of $1,280 in the coming
days if the dollar weakness continues," ThinkMarkets chief
market analyst Naeem Aslam said.     
    India's gold imports fell for a sixth month in June to 44
tonnes, provisional industry data showed.             
    Gold-backed exchange-traded funds (ETFs) saw outflows in
North America and Asia, but saw inflows in Europe during June,
the World Gold Council said.             
    Silver        gained 0.2 percent at $16.01 an ounce, and
platinum        fell 0.1 percent to $841.24, both heading for a
0.3 percent weekly drop.
    Palladium        slipped 0.2 percent at $949.95 an ounce, on
track for a 0.1 percent weekly drop. 
    All three metals were headed for their fourth straight
weekly decline.

 (Additional reporting by Apeksha Nair and Karen Rodrigues in
Bengaluru; Editing by Louise Heavens and David Gregorio)
  
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