* SPDR Gold holdings fell 0.22% on Tuesday
* Gold hits $1,435.99/oz, a peak since June 25 (Adds quote, details, and updates prices)
By Harshith Aranya and Eileen Soreng
July 3 (Reuters) - Gold prices touched a one-week high on Wednesday, driven by upbeat safe-haven sentiment as hopes of a quicker resolution of the U.S.-China trade dispute ebbed, while a potential trade feud with Europe deepened concerns over tepid economic growth.
Spot gold was up 0.5% at $1,425.64 per ounce, as of 0711 GMT. Earlier in the session, the bullion hit $1,435.99, a peak since June 25.
U.S. gold futures rose 1.5% to $1,429.30 an ounce.
Extended weakness in global manufacturing data and U.S. trade protectionism looked poised to support the bullion’s appeal as investors avoided riskier assets, said Benjamin Lu, analyst, Phillip Futures.
Just days after reaching a truce on China trade, the U.S. Trade Representative’s office turned to Europe on Monday in a long-running dispute over aircraft subsidies, adding extra products to a list of EU goods that may be hit with tariffs.
The market also grew wary of the chances of a quick resolution to the year-long U.S.-China trade war after U.S. President Donald Trump’s comments that any deal would have to be tilted in favour of Washington.
Asian shares fell amid trade concerns and global growth worries. The dollar also struggled for traction, while U.S. bond yields fell to their lowest levels since late 2016.
U.S. yields were also pressured by a drop in British yields after Bank of England Governor Mark Carney flagged uncertainties over Brexit and trade conflicts that prompted speculation that the central bank may lower interest rates, on the heels of other major central banks such as the U.S. Federal Reserve and the European Central Bank.
Major central banks are advocating lower interest rates and that provides an underlying strength to gold prices, said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.
“Gold prices are on a path to get some correction ... Investors should buy on dips.”
Investors will now focus on the release of U.S. economic data including non-farm payrolls on Friday, to better assess whether Fed will cut interest rates later this month.
“Technically gold remains positive,” said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers, adding there is a strong resistance around $1,435-$1,440 zone, while $1,410-$1,400 is a very good support for near term.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings dipped 0.2% to 798.44 tonnes on Tuesday.
Silver rose 0.2% to $15.33 per ounce.
Platinum climbed 0.4% to $830.82 per ounce, while palladium was also up 0.4% at $1,563.66 per ounce, having touched an over three-month peak of $1,568 earlier in the session. (Reporting by Eileen Soreng and Harshith Aranya in Bengaluru; Editing by Richard Pullin and Sherry Jacob-Phillips)