* Speculators raise net longs in COMEX gold in late May
* SPDR Gold holdings up 0.3% on Friday to 743.21 T
* Investors raise bets on U.S. Federal Reserve rate cut (Updates prices)
By Arijit Bose
June 3 (Reuters) - Gold jumped more than 1% on Monday to its highest in more than nine weeks on worries that U.S.-Chinese trade tensions and Washington’s threat of tariffs on Mexico would hurt the global economy.
Spot gold climbed 1.2% to $1,320.57 per ounce by 12:15 a.m. EDT (1615 GMT), after touching its highest since March 26 at $1,320.76.
U.S. gold futures rose 1.1% to $1,325.60 an ounce.
“There are concerns still surrounding the trade wars, whether it be surrounding the tariffs with Mexico or the tariffs with China. There is a ‘flight to safety’ buying going into metals,” said Bob Haberkorn, senior market strategist at RJO Futures.
Relations between the United States and China got another jolt when the two nations clashed again at the Shangri-La Dialogue in Singapore on Sunday.
Mexican Foreign Minister Marcelo Ebrard said U.S. President Donald Trump’s threat of punitive tariffs on Mexico would be devastating and would not stop waves of Central American migrants from crossing the southern U.S. border.
Equity markets bore the brunt of the two-pronged tariff threat from the United States, while safe-haven assets such as the Swiss franc and gold have been hefty beneficiaries.
Adding to woes, factory activity contracted across Asia and Europe last month on fears of a global economic downturn.
Furthermore, U.S. manufacturing growth slowed further in May to its weakest pace in more than two-and-a-half years, a national purchasing managers’ survey showed on Monday.
“There is some talk now that the Fed is going to cut as much as half a basis point at some point this year,” Haberkorn added.
Lower interest rates increase the opportunity cost of holding gold, and any indication of a rate cut is read as adding to the metal’s appeal.
“Technically, the gold bulls have gained the overall near-term technical advantage and have momentum now. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,335.70,” Jim Wyckoff, senior analyst at Kitco, said in a note.
Signifying an uptick in investor sentiment towards the metal, speculators increased their net long positions in COMEX gold in the week to May 28, data showed.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.3% to 743.21 tonnes on Friday.
Silver rose 1.2% to $14.75 per ounce. The metal touched an almost three-week high of $14.79 earlier in the session.
Palladium fell 0.8% to $1,315.05 per ounce, while platinum jumped 3.7% higher at $820.65 per ounce, and hit a more than two-week high at $822.65.
Reporting by Arijit Bose and Harshith Aranya in Bengaluru; Editing by Dan Grebler and Marguerita Choy