September 3, 2018 / 1:25 AM / 3 months ago

PRECIOUS-Gold edges down as rising trade tensions buoy dollar

BENGALURU, Sept 3 (Reuters) - Gold edged lower on Monday, with prices breaking back below the psychological $1,200 level as the dollar rose on the back of worries about escalating global trade tensions.

FUNDAMENTALS

* Spot gold was down 0.3 percent at $1,196.93 an ounce at 0054 GMT.

* U.S. gold futures were down 0.4 percent at $1,202.50 an ounce.

* Markets are nervous about the escalating trade conflict between the United States and China, after U.S. President Donald Trump said last week that he wanted to move ahead on a plan to impose tariffs on Chinese imports worth $200 billion.

* Trump said on Saturday there was no need to keep Canada in the North American Free Trade Agreement and warned Congress not to meddle with the trade negotiations or he would terminate the trilateral trade pact altogether.

* Gold prices have fallen about 8 percent so far this year amid rising U.S. interest rates, international trade disputes and the Turkish currency crisis, with investors preferring the dollar as a safe-haven.

* The dollar index, which measures the greenback against a basket of currencies, was up 0.1 percent at 95.204.

* Hedge funds and money managers cut their net short positions in COMEX gold contracts in the week to Aug. 28 for the first time in more than a month, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.

* Holdings of SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, fell 0.35 percent to 755.16 tonnes on Friday from Thursday.

* The U.S. Mint sold 21,500 ounces of American Eagle gold coins in August, down 38.6 percent from the previous month.

* Canada’s Tahoe Resources Inc, said on Friday it had temporarily suspended mining operations at its La Arena gold mine in Peru after protesters trespassed on its property and demanded payment for environmental impacts of mining on their community.

* Physical gold demand in India was moderate last week amid an improvement in retail purchases before the festival season despite an increase in domestic prices, while top consumer China saw a slight uptick in activity.

DATA AHEAD (GMT)

0145 China Caixin manufacturing PMI final Aug

0750 France Markit manufacturing PMI Aug

0755 Germany Markit/BME manufacturing PMI Aug

0800 Euro zone Markit manufacturing PMI Aug

Reporting by Nallur Sethuraman in Bengaluru; editing by Richard Pullin

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