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PRECIOUS-Gold prices steady as U.S.-China trade concerns persist
Published at 12/06/2019 at 02:39

June 12 (Reuters) - Gold prices steadied on Wednesday after touching a one-week low in the previous session, buoyed by concerns around U.S.-China trade relations amid expectations of an interest rate cut by the U.S. Federal Reserve.

FUNDAMENTALS

* Spot gold was flat at $1,326.90 as of 0115 GMT, after falling to its lowest since June 3 at $1,319.35 in the previous session.

* U.S. gold futures were also steady at $1,330.70 an ounce.

* U.S. President Donald Trump on Tuesday defended the use of tariffs as part of his trade strategy, while China vowed a tough response if the United States insists on escalating trade tension amid ongoing negotiations.

* Trump said that he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees again to four or five "major points," which he did not specify.

* He also took an aim at the U.S. Federal Reserve, saying interest rates were "way too high" and the central bank had "no clue".

* Fed policymakers will meet on June 18-19 against the backdrop of rising trade tensions, slowing U.S. growth and a sharp step-down in hiring in May that have led markets to price in at least two rate cuts by the end of 2019.

* Asian share markets got off to a cautious start on Wednesday as the White House took a tough line on a trade deal with China, just as investors were bracing for the latest batch of economic data from the Asian giant.

* A drop in two-year treasury prices flattened the yield curve on Tuesday after a Labor Department report showed producer prices increased in May for the second consecutive month, pointing to a steady pick-up in underlying inflation pressures.

* Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.03% to 756.18 tonnes on Tuesday from 756.42 tonnes on Monday.

DATA AHEAD (GMT)

* 1230 U.S. Core CPI YY, NSA May

* 1230 U.S. CPI MM, SA May

* 1230 U.S. CPI YY, NSA May

(Reporting by Brijesh Patel in Bengaluru; editing by Uttaresh.V)

((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848 5832, Outside U.S. +91 8067493865; Reuters Messaging: Brijesh.Patel1.thomsonreuters.com@reuters.net))