* Trump proposes $100 bln in new tariffs on China
* Focus on U.S. non-farm payrolls report for March
* Markets await Powell’s comments later on Friday
* Palladium hits lowest since mid-August last year (Recasts with updated prices, adds comment and milestones)
By Swati Verma
BENGALURU, April 6 (Reuters) - Gold prices hit over two-week lows on Friday, ahead of the U.S. payrolls data later in the day, weighed down by a firmer dollar even as President Donald Trump re-ignited trade war fears by proposing $100 billion in new tariffs on China.
Spot gold was down 0.2 percent at $1,324.01 per ounce, as of 0800 GMT, after hitting $1,321.16 earlier in the session, its lowest since March 21.
The U.S. gold futures slipped 0.1 percent to $1,327.70 an ounce.
The dollar index, which measures the greenback against six other major currencies, gained 0.1 percent to 90.519 ahead of the closely watched U.S. non-farm payrolls report.
The non-farm payrolls data due on Friday is expected to show that 193,000 jobs will be added, according to a Reuters poll.
“There are the usual precautionary position adjustments in the game ahead of the NFP (non-farm payroll) as a substantial employment number, and wage growth would see the market quickly price in a more aggressive Fed policy (four rate hikes) and push gold prices lower,” said Stephen Innes, head of trading in Asia-Pacific for OANDA in Singapore.
Bullion prices earlier rose to $1,333.28 an ounce on fresh U.S.-China trade worries.
The focus will be more on the trade war and the non-farm payroll data will have a short-term impact on gold prices, said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
Trump on Thursday said he had instructed U.S. trade officials to consider $100 billion in additional tariffs on China, fuelling an already heated trade dispute between the world’s two biggest economies.
“Just when you thought it was safe to go back in the water, President Trump orders U.S. Trade Representative to consider $100 (billion) in additional tariffs, confirming the view that trade war rhetoric is unlikely to leave the picture anytime soon,” Innes said.
While a holiday in China kept trading volumes thin, investors also awaited comments by U.S. Federal Reserve Chairman Jerome Powell due on Friday.
“Regarding Powell, investors will be on the lookout for any cautionary comments regarding potential deleterious impacts from trade war tensions on the macro outlook, thereby impinging on Fed rate hike prospects,” OCBC said in a note.
In other precious metals, spot silver dropped 0.2 percent to $16.31 an ounce.
Platinum slipped 0.6 percent to $904.50 an ounce, and was on track for a second straight week of losses, down over 2 percent.
Palladium fell 0.4 percent to $901.50 an ounce after hitting $898 earlier in the session, its lowest since Aug. 16, 2017. The metal was on track for an eleventh straight session of declines and down over 5 percent so far this week. (Reporting by Swati Verma in Bengaluru; Editing by Christian Schmollinger and Sherry Jacob-Phillips)