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* Speculators trim net short positions in gold, silver
* Spot gold may test support at $1,193/oz- technicals
By Sethuraman N R
BENGALURU, Sept 17 (Reuters) - Gold inched up on Monday as investors looked for short-term gains using the metal’s recent narrow trading range, amid increasing Sino-U.S. trade tensions and prospects of further interest rate hikes by the U.S. Federal Reserve.
Spot gold was up 0.2 percent at $1,195.83 an ounce as of 0655 GMT, after falling 0.6 percent on Friday when it marked its third straight weekly decline.
U.S. gold futures were down 0.1 percent at $1,199.80.
“It is a range-buying trade as people watch for moves in the dollar and developments in U.S.-China tariffs dispute,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
Gold has held a $25 range for the past few weeks and could hold that till the markets get a specific direction on rate hikes for this year in the upcoming September Fed meeting, he added.
Markets are nervously awaiting Washington’s announcement of a new round of tariffs on Chinese imports, setting the stage for possible reprisals by Beijing.
“The price action (in gold) shows that the influence of the news coming out on tariffs is waning a little bit,” said Ji Ming, chief analyst at Shandong Gold Group.
“We even see gold rising rapidly towards $1,230-$1,240 levels once the impact of the trade war is clearer ... It looks like a relatively good opportunity to buy gold at the current levels.”
Gold prices have declined about 12.6 percent from April amid intensifying global trade tensions and under pressure from rising U.S. interest rates.
Though gold is generally presumed to be a safe-haven asset, the months-long trade rift between Washington and Beijing has prompted investors to opt for the U.S. dollar in the belief that the United States has less to lose from the dispute.
The dollar index was steady at 94.915, having bounced from over six-week lows of 94.359 hit last week.
“We have to suspect that the dollar will regain upside momentum, especially if the trade environment takes a turn for the worst just ahead of the Fed’s month-end meeting,” INTL FCStone analyst Edward Meir said in a note.
“Although investors are expecting yet another quarter-point rate increase, the concern is that a change in policy wording could make a more definitive case for future rate hikes.”
Meanwhile, investors trimmed their net short position in Comex gold and silver in the week to Sept. 11, a U.S. data showed.
Spot gold may retest a support at $1,193 per ounce, after bouncing moderately into a range of $1,197-$1,200, according to Reuters technical analyst Wang Tao.
Among other precious metals, spot silver was up 0.3 percent at $14.08.
Platinum rose 0.3 percent to $793.90, while palladium rose 0.1 percent to $978.50 (Reporting by Nallur Sethuraman in Bengaluru; editing by Richard Pullin and Sunil Nair)