August 29, 2018 / 1:49 AM / a month ago

PRECIOUS-Gold prices inch up, but U.S.-China trade tensions weigh

BENGALURU, Aug 29 (Reuters) - Gold prices edged up on Wednesday after falling as much as 1 percent in the previous session, but Sino-U.S. trade tensions continued to drag on the precious metal.

FUNDAMENTALS

* Spot gold was up 0.1 percent at $1,202.46 an ounce at 0112 GMT. Prices hit their highest since Aug. 10 at $1,214.28 on Tuesday, but fell as much as 1 percent later in the session.

* U.S. gold futures were down 0.5 percent at $1,208.90 an ounce on Wednesday.

* U.S. and Chinese officials ended two days of talks last week with no major breakthrough as their trade war escalated with activation of another round of duelling tariffs.

* The dollar, which had risen recently on safe-haven buying from investors nervous about the trade dispute and U.S. interest rate hikes, slipped to four-week lows on Tuesday after a trade deal between U.S. and Mexico.

* The dollar index, which measures the greenback against a basket of currencies, was mostly steady on Wednesday at 94.756.

* In recent months, investors have sought safety from global trade conflict in U.S. Treasuries, which entails buying dollars.

* As long as the trade tensions between U.S. and China continue to persist, the U.S. dollar will benefit, hurting gold, analysts said.

* U.S. Treasury yields rose on Tuesday across maturities to weekly highs.

* Asian share markets were left in limbo on Wednesday as optimism over the U.S.-Mexico trade deal was quickly replaced by caution ahead of a looming deadline on tariffs with China.

* In Washington, Canada’s main trade negotiator was in talks to preserve a three-nation North American Free Trade Agreement following Monday’s deal between the United States and Mexico.

* Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.62 percent to 759.87 tonnes on Tuesday from Monday. (Reporting by Nallur Sethuraman in Bengaluru Editing by Joseph Radford)

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