Gold prices firm as US-China trade tensions escalate

Gold steadied on Thursday, with its appeal as a safe-haven for investors burnished by growing tensions ahead of key Sino-US trade negotiations this week.

Fundamentals

* Spot gold was up 0.1 per cent at $1,281.61 per ounce at 0114 GMT.

* US gold futures edged up 0.1 per cent to $1,283.10 an ounce.

* US president Donald Trump said on Wednesday that China "broke the deal" it had reached in earlier trade talks with the United States, and vowed not to back down on imposing new tariffs on Chinese imports unless Beijing "stops cheating our workers".

* Trump has threatened to raise tariffs to 25 per cent from 10 per cent on $200 billion worth of Chinese imports at 12:01am ET (0401GMT) on Friday. Beijing has threatened to retaliate if tariffs rise, without elaborating on the details.

* Asian shares hit six-week lows in early trade on Thursday as growing concerns ahead of the latest US-China trade talks fanned fresh concerns about the outlook for the global economy.

* The dollar hovered near a six-week low versus the yen early on Thursday, weighed down against its safe-haven Japanese peer as risk aversion gripped broader markets.

* A weaker dollar makes bullion less expensive for holders of other currencies.

* Also aggravating geopolitical concerns, Trump on Wednesday imposed new sanctions on Iran, targeting revenue from its exports of industrial metals. That was the latest salvo in tensions between Washington and Tehran over a 2015 international accord curbing the Islamic Republic's nuclear programme.

* This was soon after Iran announced that it was relaxing some restrictions on its nuclear programme, steps that stopped short of violating the deal with world powers for now, but threatening more action if countries do not shield it from US sanctions.

* Barrick Gold Corp , the world's second-largest gold producer, on Wednesday said it remained open to new investments, even as it plans to shed $1.5 billion of less productive mines.