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Gold rebounds on Trump policy uncertainty

NEW YORK/LONDON (Reuters) - Gold edged higher on Tuesday, snapping a three-session losing streak, on uncertainty over the economic policies of U.S. President-elect Donald Trump.

Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London, Britain July 21, 2015. REUTERS/Neil Hall/Files

Trump has vowed to boost domestic spending, which has the potential to stoke inflation and dent demand for non-yielding bullion, but the market is seeking more details on his policies.

Spot gold XAU= was up 0.29 percent at $1,223.41 an ounce at 2:33 p.m. EST (1933 GMT), after slipping on Monday to its lowest since June 3 at $1,211.08.

U.S. gold futures GCcv1 settled up 0.2 percent at $1,224.50.

“Gold will have to wait and see when Trump moves into the White House and what policies he will cancel,” Natixis precious metals analyst Bernard Dahdah said.

Trump is due to officially take power in January with promises of rolling back a major trade agreement and cutting taxes.

“There have been lots of statements of U.S. policy, but we don’t have details and we don’t know what it looks like. That’s fertile ground for gold,” ETF Securities commodities strategist Martin Arnold said.

Generally, investors pile into safe-haven assets such as gold in times of political and economic uncertainty.

The U.S. dollar index .DXY held above the 100 level and touched a fresh 11-month high, and Treasuries prices were little changed with yields near multi-month highs. [MKTS/GLOB]

“The (gold) market is taking a little hiatus. It’s not convinced that the risk on is over and therefore it gets clipped when it goes above $1,230,” said James Steel, chief metals analyst for HSBC Securities.

“It gives the impression of a dead cat bounce (but it’s) too soon to say.”

Gold has shed nearly 9 percent from a Nov. 9 high of $1,337.40 after Trump’s election victory, hurt by a stronger U.S. dollar and surging Treasury yields.

U.S. retail sales rose more than expected in October as households bought motor vehicles and a range of other goods, pointing to sustained economic strength that could allow the Federal Reserve to raise interest rates next month.

Higher rates typically pressure bullion prices.

Among other precious metals, silver XAG= was up 0.7 percent at $16.99 an ounce, having touched its lowest since June 8 at $16.61 in the previous session.

Platinum XPT= rose 0.4 percent to $934.20, bouncing back from the more than eight-month low of $917.50 touched on Monday.

Palladium XPD= gained as much as 1.6 percent to reach $709.20, its highest since Oct. 4.

Additional reporting by Apeksha Nair in Bengaluru; Editing by Mark Potter and Richard Chang