May 31, 2018 / 4:22 AM / 19 days ago

PRECIOUS-Gold prices rise on weaker dollar, trade tension

    * Gold headed for second straight monthly decline
    * Silver, platinum, palladium set for monthly gains

 (Adds comments, details and updates prices)
    By Karen Rodrigues
    BENGALURU, May 31 (Reuters) - Gold prices rose on Thursday,
as the dollar eased from 6-1/2-month highs hit earlier this
week, with prices further supported by concerns over U.S.-China
trade.
    Spot gold        rose 0.4 percent to $1,305.87 per ounce by
0652 GMT, but was down 0.7 percent for the month, in what could
be its second straight monthly decline.
    U.S. gold futures         for June delivery were 0.3 percent
higher at $1,305.80 per ounce.
    "Gold is largely being influenced by how the dollar is
moving and the dollar move overnight is a clear representation
of why gold prices have risen this morning," said OCBC analyst
Barnabas Gan.
    The dollar index       , which measures the greenback
against a basket of six major currencies, fell 0.3 percent to
93.873. It touched its highest since early November at 95.025 on
Tuesday.       
    A weaker dollar makes bullion cheaper for holders of other
currencies.
    "Prices are still very dependent on how risk aversion is
playing up and the global news surrounding the U.S.-Sino trade
tensions as well as the possibility of a North Korea summit,
that uncertainty is a big driver for gold prices," Gan added.
    China said on Wednesday it was ready to fight back if
Washington was looking for a trade war, days ahead of a planned
visit by U.S. Commerce Secretary Wilbur Ross.             
    Meanwhile, U.S. and North Korean officials met in New York
late on Wednesday in the first of two days of talks about the
future of Pyongyang's nuclear weapons program and a possible
summit between U.S. President Donald Trump and North Korean
leader Kim Jung Un.             
    U.S. economic growth slowed slightly more than initially
thought in the first quarter as consumer spending rose at its
weakest pace in nearly five years.             
    However, tensions over Italy cooled as the country's two
main anti-establishment parties renewed efforts to form a
government, reducing the prospect of a general election, which
had stoked fears that such a vote will effectively be a
referendum on the country's euro membership.            
    "An inherent weakness in the greenback, heightened risks in
the global financial system and geopolitical uncertainty will
cement safe-haven demand for the longer term," Benjamin Lu, a
commodities analyst at Singapore-based broker Phillip Futures,
said in a note.  
    In other precious metals, spot silver        rose 0.4
percent to $16.58 an ounce and platinum        gained 0.7
percent to $912.40 an ounce. 
    Both the metals were headed for a monthly rise of about 1
percent, their biggest since January.
    Palladium        was 0.2 percent higher at $987 an ounce and
was headed for its biggest monthly gain since December, climbing
over 2 percent.

 (Reporting by Karen Rodrigues in Bengaluru; editing by Amrutha
Gayathri and Subhranshu Sahu)
  
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