August 16, 2019 / 1:39 AM / 10 days ago

PRECIOUS-Gold prices rise on falling bond yields, trade uncertainty

Aug 16 (Reuters) - Gold prices gained on Friday as the steep fall in U.S. bond yields continued, while conflicting signals on the Sino-U.S. trade war added to economic uncertainty.

FUNDAMENTALS

* Spot gold was up 0.2% at $1,525.21 per ounce at 0105 GMT.

* The metal has gained nearly 2% so far this week, and is on track for its third straight weekly gain.

* U.S. gold futures rose 0.3% to $1,535.50 an ounce.

* Data showing strong U.S. retail sales in July did not have an impact on the bond rally. Yields on 30-year paper hit an all-time low and are set to fall 27 basis points for the week, the sharpest such decline since mid-2012.

* China on Thursday vowed to counter the latest $300 billion U.S. tariffs, but also called on the U.S. to meet it halfway on a potential trade deal.

* On Thursday, U.S. President Donald Trump said he believed China wanted to make a trade deal, and that the trade conflict would be fairly short.

* Investors are focused on the Federal Reserve’s annual symposium next week. Traders see an about one-in-three chance of a 50 basis-point rate cut by the Fed this September.

* The European Central Bank’s (ECB) Olli Rehn on Thursday flagged the need for a significant easing package in September. The ECB is widely expected to cut interest rates by at least 10 basis points when it meets next month.

* Mexico’s central bank cut its key lending rate for the first time since June 2014 on Thursday.

* Against a basket of six major currencies, the dollar index edged higher. Since hitting a three-week low on Aug. 9, the dollar index has recovered, rising 1.1%.

DATA AHEAD (GMT)

* 1230 US Housing Starts Number July

* 1400 US U Mich Sentiment Prelim August

Reporting by Harshith Aranya in Bengaluru; editing by Richard Pullin

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