September 6, 2019 / 1:50 AM / 10 days ago

PRECIOUS-Gold eases as trade optimism, firm U.S. data lift risk appetite

Sept 6 (Reuters) - Gold prices inched lower on Friday, after dropping more than 2% in the previous session, as investors were driven to riskier assets encouraged by stronger U.S. economic data and hopes of a thaw in the U.S.-China trade tensions.

FUNDAMENTALS

* Spot gold was down 0.1% at $1,516.90 per ounce, as of 0104 GMT. In the previous session, the bullion dropped to $1,509.03, its lowest level since Aug. 23.

* Prices also registered their biggest one-day percentage decline in nearly three years on Thursday.

* U.S. gold futures were little changed at $1,526 an ounce.

* The dollar was supported on Friday, while Asian stocks tracked global peers and rose on bolstered risk appetite.

* U.S. services sector activity accelerated in August and private employers boosted hiring, suggesting the economy continued to grow at a moderate pace despite trade tensions, which have stoked financial market fears of a recession.

* China and the United States on Thursday agreed to hold high-level talks in early October in Washington, cheering investors hoping for a trade war thaw as new U.S. tariffs on Chinese consumer goods chip away at global growth.

* Trade tensions between the United States and China are set to knock half a percentage point off of global growth by next year, France’s finance minister said in an interview published on Thursday.

* British Prime Minister Boris Johnson’s plan to kick off what is in effect an election campaign casting parliament as the enemy of Brexit was overshadowed on Thursday when his younger brother quit the government, citing the national interest.

* Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.69% to 889.75 tonnes on Thursday from 895.90 tonnes on Wednesday.

* The retail price of physical gold in Japan climbed to its highest in nearly 40 years on Thursday, a surge accentuated by fluctuations in the value of the yen but mirroring a global hunt for the safe-haven precious metal amid worries that the U.S.-China trade row could further depress the global economy.

DATA AHEAD 0600 Germany Industrial Output MM July 0645 France Reserve Assents Total Aug 0730 UK Halifax House Prices MM Aug 0900 EU GDP Revised QQ, YY Q2 1230 U.S. Non-Farm Payrolls Aug 1230 U.S. Unemployment Rate Aug 1230 U.S. Average Earnings YY Aug

Reporting by Eileen Soreng in Bengaluru, Editing by Sherry Jacob-Phillips

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