June 19, 2018 / 4:01 AM / 2 months ago

PRECIOUS-Gold prices gain as U.S.-China trade spat stokes safe-haven buying

    * 'Risk-off' sentiment sends Asian shares to over 6-month
low
    * Spot gold may bounce to resistance at $1,290/oz
-technicals
    * Platinum hits 6-month low

 (Adds comment, detail; updates prices)
    By Apeksha Nair
    BENGALURU, June 19 (Reuters) - Gold prices rose on Tuesday,
supported by safe-haven buying as an escalating trade spat
between the United States and China sparked a sell-off in equity
markets.
    Spot gold        was up 0.2 percent at $1,280.29 an ounce by
0640 GMT.  
    U.S. gold futures         for August delivery were 0.2
percent higher at $1,282.60 per ounce.     
    Asian stocks and the U.S. dollar extended a global downturn
after President Donald Trump threatened to impose a 10 percent
tariff on $200 billion of Chinese goods in an escalating
tit-for-tat trade war between the world's two biggest economies.
                    
    The dollar hit a one-week low versus the yen        and
Asian shares outside Japan                 slid 2 percent to
their lowest level in over six months.                   
    "There is a bit of panic as investors are looking for cover,
especially from equity market, and as we know gold does offer
that hedge," said Stephen Innes, APAC trading head at OANDA.
    Gold prices can gain during times of financial and political
uncertainty as the metal is seen as a safe place to park assets,
alongside the yen.
    Spot gold may bounce moderately to a resistance at $1,290
and then retest support at $1,277 per ounce, said Reuters
technicals analyst Wang Tao.             
    However, limiting scope for upside in the precious metal was
the hawkish monetary policy stance by the U.S. Federal Reserve
when it raised its benchmark lending rate last week for the
second time this year, said John Sharma, an economist at
National Australia Bank.             
    "Fed Chair Jerome Powell's comment that the U.S. economy was
'in great shape' is more in line with four rate rises this year.
This is somewhat more aggressive than previously anticipated,"
Sharma said.  
    The U.S. economy "appears to be in a pretty good place" that
should let the Fed continue its steady program of raising
interest rates, another Fed official said on Monday.
            
    Higher U.S. rates tend to boost the dollar and weigh on
gold, in which it is priced.
    Meanwhile, in other precious metals, silver        was
unchanged at $16.40 an ounce, after earlier hitting the lowest
since June 5 at $16.34.
    Platinum        fell 0.3 percent to $878.50 an ounce, having
earlier touched its lowest since mid-December at $873.
    Palladium        was down 0.6 percent at $983.60 an ounce,
after marking its lowest since June 5 at $979.99 overnight.

 (Reporting by Karen Rodrigues and Apeksha Nair in Bengaluru;
Editing by Subhranshu Sahu)
  
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