July 3, 2018 / 1:23 AM / 5 months ago

PRECIOUS-Gold prices edge higher on softer dollar, trade worries

    BENGALURU, July 3 (Reuters) - Gold prices crept higher early
on Tuesday, after falling about 1 percent to a
six-and-a-half-month low in the previous session, as a softer
dollar and mounting global trade tensions supported the
safe-haven metal.
    
    FUNDAMENTALS  
    * Spot gold        was up 0.1 percent at $1,242.23 an ounce
as of 0044 GMT. It fell about 1 percent to $1,239.20, its lowest
since Dec. 12, on Monday.
    * U.S. gold futures         were 0.1 percent higher at
$1,243.10 an ounce.
    * The dollar index       , which measures the greenback
against a basket of six major currencies, was 0.2 percent lower
at 94.864, after gaining about 0.4 percent the previous day.
      
    * U.S. President Donald Trump warned the World Trade
Organization on Monday that "we'll be doing something" if the
United States is not treated properly, just hours after the
European Union said that U.S. automotive tariffs would hurt its
own vehicle industry and prompt retaliation.             
    * The White House said on Monday that Canada's decision to
enact tariffs on C$16.6 billion ($12.63 billion) worth of
American goods in retaliation for U.S. tariffs on imports of
Canadian steel and aluminum would not help its economy.
            
    * The U.S. Chamber of Commerce on Monday denounced President
Trump's handling of global trade disputes, issuing a report that
argued tariffs imposed by Washington and retaliation by its
partners would boomerang badly on the American economy.
            
    * Investors have sharply increased their use of hedging
strategies, signaling concerns that the intensifying trade
battle between the United States and China might hit economies
from Germany to South Korea.             
    * U.S. Secretary of State Mike Pompeo will leave for North
Korea on Thursday seeking agreement on a plan for the country's
denuclearization, despite mounting doubts about Pyongyang's
willingness to abandon a weapons program that threatens the
United States and its allies.             
    * U.S. manufacturing activity surged in June, but a strong
economy and import tariffs were causing bottlenecks in the
supply chain, which could potentially weigh on production in the
months ahead.             
    * The U.S. economy is growing at a 4.1 percent annualized
rate in the second quarter in the wake of the latest data on
construction spending and manufacturing activity, the Atlanta
Federal Reserve's GDPNow forecast model showed on Monday.
            
    * The Perth Mint's sales of gold products in June increased
about 14 percent from May sales, while silver sales fell about
60 percent from the prior month, the mint said on Monday.
            
    * Holdings of SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, said its holdings fell 1.19
percent to 809.31 tonnes on Monday.          
    
    DATA AHEAD (GMT)
    
    0900  Euro zone      Producer prices        May
    0900  Euro zone      Retail sales           May
    1345  U.S.           ISM-New York index     June
    1400  U.S.           Factory orders         May

 (Reporting by Karen Rodrigues in Bengaluru; Editing by Amrutha
Gayathri)
  
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