July 4, 2018 / 10:33 AM / a month ago

PRECIOUS-Gold prices touch one-week high on softer U.S. dollar

    * Trade war worries drag world stocks lower, yuan steadies
    * Fed June minutes due Thursday, payrolls due Friday

 (Updates throughout)
    By Marcy Nicholson and Maytaal Angel
    CALGARY/LONDON, July 4 (Reuters) - Gold rose to a one-week
high on Wednesday, extending the prior session's rebound from a
seven-month low, helped by a softer U.S. dollar and smoldering
trade policy tensions, though the prospect of the Federal
Reserve raising interest rates further may limit gains.
    The U.S. dollar index        fell against a basket of major
currencies, while the Chinese yuan        rose for a second day
with central bank support, after seeing an 11-month low this
week.       
    A weaker U.S. dollar makes dollar-priced gold cheaper for
non-U.S. investors.
    "Gold has been trending lower for several weeks and this
being (U.S) non-farm payrolls (week) the dollar is likely to
remain in range, so people are taking profit on dollar and gold
positions," said Fawad Razaqzada, an analyst at FOREX.com.
    "I'm still not convinced we've seen the lows so long as gold
remains below $1,300. The dollar is on an upwards trajectory. I
don't think (looming U.S. interest rate) hikes are fully priced
into the dollar or gold."
    Spot gold        was up 0.3 percent at $1,256.20 an ounce by
1:59 p.m. EDT (17:59 GMT) after touching $1,261.10, a one-week
high. The yellow metal has gained over $20 from Tuesday's low of
$1,237.32 an ounce, its weakest since Dec. 12. 
    U.S. gold futures         for August delivery rose 0.4
percent to $1,258.10 in a shortened session and will not have a
settlement price due to the U.S. Independence Day holiday on
Wednesday. 
    Investors are now looking to minutes of the June U.S.
Federal Reserve meeting due for publication on Thursday and the
U.S. non-farm payrolls and unemployment data on Friday for
further cues on monetary policy. Markets are pricing in two more
Fed interest rate hikes for 2018.
    World stocks were flat amid growing anxiety ahead of
Washington's end of week deadline to impose tariffs on Chinese
imports.            
    "Since the trade wars have been doing the rounds, if
anything we've seen gold come lower. But if it continues to
escalate gold could go only one way and that's higher," a
Sydney-based trader said. 
    China is putting pressure on the European Union to issue a
strong joint statement against U.S. President Donald Trump's
trade policies at a summit later this month but is facing
resistance, European officials said.             
    Gold is often regarded as a safe haven during times of
political and financial uncertainty.
    Silver        was 0.1 percent higher at $16.03 an ounce and
palladium        gained 0.7 percent to $946.
    Platinum        was flat at $837 an ounce. The metal fell on
Tuesday to the lowest since December 2008 at $793.   

 (Additional reporting by Karen Rodrigues in Bengaluru; editing
by Elaine Hardcastle and Emelia Sithole-Matarise)
  
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