June 24, 2019 / 1:50 AM / 2 months ago

PRECIOUS-Gold holds near 6-year peak on weaker dollar, Middle East tensions

June 24 (Reuters) - Gold prices extended gains in early Asian trade on Monday, hovering near a six-year peak touched in the previous session, as a weaker dollar and heightened tensions between the United States and Iran underpinned the precious metal.

FUNDAMENTALS

* Spot gold was up 0.6% at $1,406.56 per ounce as of 0114 GMT, heading for a fifth straight session of gains. Gold prices hit $1,410.78 on Friday, their highest since Sept. 4, 2013.

* U.S. gold futures rose 0.7% to $1,410.20 per ounce.

* While U.S. President Donald Trump said on Sunday he was not seeking war with Tehran, U.S. Secretary of State Mike Pompeo said “significant” sanctions on Tehran would be announced on Monday.

* The dollar fell to a three-month low against a basket of currencies on bets the U.S. Federal Reserve would start lowering interest rates.

* The Fed and the European Central Bank last week hinted they were open to ease policies to counter a global economic slowdown, exacerbated by global trade tensions.

* The focus now shifts to whether Washington and Beijing can resolve their trade dispute at a summit in Japan this week of leaders from the Group of 20 leading world economies.

* Chinese President Xi Jinping will attend the G20 summit in Japan this week, state-run Xinhua news agency said on Sunday, giving the first official confirmation of his attendance at a gathering where he is expected to meet U.S. President Donald Trump.

* Meanwhile, the U.S. Commerce Department said on Friday it was adding several Chinese companies and a government-owned institute involved in super computing with military applications to its national security “entity list” that bars them from buying U.S. parts and components without government approval.

* Asian shares were off to a cautious start on Monday as investors pinned their hopes on any signs of a thaw in Sino-U.S. trade negotiations.

* Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 4.57% to 799.03 tonnes on Friday from 764.10 tonnes on Thursday.

* Hedge funds and money managers boosted their bullish stance in COMEX gold in the week to June 18, the U.S. Commodity Futures Trading Commission said on Friday.

* Physical gold discounts in India widened to their highest in almost three years last week as local prices surged to record peaks, while Asian hubs, barring China, saw aggressive selling from customers as global bullion rates scaled a six-year peak.

DATA AHEAD (GMT)

* 1330 Brazil Current Account May

* 1330 Brazil Foreign Direct Investment May (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu)

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