* Gold up 0.8% so far this week, set for 4th weekly gain
* Palladium set for biggest weekly gain since September 2018
* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl (Adds comment, updates prices)
By Eileen Soreng
June 14 (Reuters) - Gold hit its highest since April last year on Friday as political tensions in the Middle East and weak economic data from China and the United States pushed it above $1,350.
Spot gold was up 0.7% at $1,351.16 per ounce at 1247 GMT, after hitting its highest since April 2018 at $1,358.04 earlier in the session.
Prices have risen 0.8% so far this week, keeping the metal on track for its fourth consecutive weekly gain. U.S. gold futures climbed 1% to $1,356.9 an ounce.
“In people’s minds there is a sense of a deeply darkening macroeconomic backdrop, in particular the likelihood that the U.S. will drop interest rates quite soon,” said Ross Norman, chief executive at bullion dealer Sharps Pixley.
Investors are getting ahead of the curve by buying gold in expectation the U.S. Federal Reserve will have to reverse its previous tightening policy, by extension pressuring the dollar and lifting gold, Norman said.
China’s industrial output growth slowed to a more than 17-year low of 5% in May, the latest sign of weakening demand in the world’s second-largest economy as the U.S. ramps up trade pressures.
The impact of the U.S.-China trade war was also evident in the U.S. labour market, which saw an unexpected rise in the number of Americans filing applications for unemployment over the last week.
Recent soft U.S. economic readings have also boosted expectations of a Fed rate cut. In addition to weighing on the dollar, lower interest rates also cut the opportunity cost of holding non-yielding bullion.
Meanwhile, world stocks struggled as Chinese data rekindled concerns over the global economy, while fears of a new U.S.-Iran confrontation intensified.
Iran has rebuffed blame from Washington for this week’s attacks on two oil tankers in the Gulf of Oman, and affirmed its responsibility for security in the Strait of Hormuz, through which almost a fifth of the world’s oil passes, state radio reported.
The price action of gold is attracting new investors and a fresh multi-year high is a possibility, said Ronan Manly, a precious metals analyst at BullionStar Singapore.
“This would bring momentum to the gold price and would spur further western gold demand, but could bring in more selling from the East.”
Elsewhere, silver gained 1% to $15.04, while platinum was up 0.2% at $808.95.
Palladium rose 0.8% to $1,455.80 after hitting its highest since April 29 at $1,466.05 earlier in the session.
The autocatalyst metal has risen about 7% so far this week, its biggest weekly gain since the week ended Sept. 21, 2018. (Reporting by Eileen Soreng in Bengaluru; Editing by Jan Harvey and Mark Potter)