* Trump imposes 10 pct tariffs on $200 bln goods from China
* Increasing rate hike views also pressuring gold (Adds quote, updates prices)
By Sethuraman N R
BENGALURU, Sept 18 (Reuters) - Gold prices fell on Tuesday as the U.S. dollar steadied amid concerns of an escalation in global trade tensions after the United States imposed a new round of tariffs on Chinese imports.
U.S. President Donald Trump on Monday imposed 10 percent tariffs on about $200 billion worth of Chinese imports and warned of more tariffs if China retaliated.
China, however, said it had no choice but to retaliate against the latest U.S. tariffs and hoped the United States would correct its behaviour.
Spot gold fell 0.3 percent to $1,197.51 an ounce at 0732 GMT, after rising 0.6 percent in the previous session.
U.S. gold futures were down 0.3 percent at $1,202.20 an ounce.
“Gold is facing a couple of headwinds ... The impending rate hike by the Fed is weighing on and obviously the escalation of trade conflict is pushing investors back in to the U.S. dollar,” ANZ analyst Daniel Hynes said.
“This (trade woes) has not helped gold prices at all. It is likely to be a pretty tough environment for gold in the next couple of weeks as it battles these two fronts.”
Although gold is presumed to be a safe-haven asset, the months-long trade rift between Washington and Beijing has prompted investors to buy U.S. dollars in the belief that the United States has less to lose from the dispute.
Gold prices have declined over 12 percent from April amid the intensifying trade dispute between the United States and China, the world’s top two economies, and as rising U.S. interest rates diminish demand for non-interest bearing bullion.
The dollar index, which measures the greenback against a basket of currencies, was steady at 94.520.
“Looking ahead, the key consideration for both dollar and gold over the coming week is pre-positioning for next week’s U.S. Federal Reserve meeting,” said Ilya Spivak, a currency strategist for Dailyfx.
“Since the priced-in forecast for a December rate hike to follow the one this month has firmed despite soft U.S. data, this might ultimately lead the dollar higher and gold lower.”
The yellow metal is highly sensitive to rising U.S. interest rates as it increases the opportunity cost of holding non-yielding metal, while boosting the dollar.
“Gold will need an upside trigger, which barring a very sharp sell-off in U.S. equities, we don’t see materializing anywhere on the horizon,” INTL FCStone analyst Edward Meir said.
Among other precious metals, spot silver fell 0.2 percent to $14.13 an ounce. Platinum rose 0.4 percent to $799.40, while palladium was up 0.4 percent at $988 an ounce. (Reporting by Nallur Sethuraman in Bengaluru; Editing by Christian Schmollinger and Sunil Nair)