March 23, 2018 / 1:42 AM / a month ago

Gold at two-week high as dollar weakens, trade war fears loom

(Reuters) - Gold prices rose to a two-week high early Friday on a softer dollar as investors scurried to safety after U.S. President Donald Trump took a step towards long-promised anti-China tariffs, stoking fears of a global trade war.

FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. Picture taken June 19, 2017. REUTERS/Edgar Su/File Photo

FUNDAMENTALS

* Spot gold XAU= climbed 0.7 percent to $1,337.16 per ounce at 0104 GMT. Prices touched their highest since March 7 at $1,338.99 and were on track for their best weekly performance since the week of Feb. 16.

* U.S. gold futures GCcv1 for April delivery rose 0.7 percent to $1,337.10 per ounce.

* Against a basket of currencies, the dollar index .DXY was down 0.3 percent at 89.632. The yen hit a 16-month high against the dollar on Friday as concerns over rising global trade tensions triggered a bout of investor risk aversion.

* A presidential memorandum signed by Trump will target up to $60 billion in Chinese goods with tariffs over what his administration says is misappropriation of U.S. intellectual property, but only after a 30-day consultation period that starts once a list is published.

* China unveiled plans on Friday to impose tariffs on up to $3 billion of U.S. imports in retaliation against U.S. tariffs on Chinese steel and aluminium products, as the world’s two largest economies stood on the brink of a trade war.

* China blamed U.S. export restrictions for its record trade surplus with the United States, but expressed hope that a solution can be found to settle trade issues between the world’s two biggest economies as U.S. tariffs loom.

* European Union leaders gave a cautious welcome on Thursday to news that Trump had decided not to apply tariffs to European steel and aluminium but said they were waiting for Washington to confirm that decision.

* The Bank of England kept rates steady on Thursday but two of its policymakers unexpectedly voted for an immediate rate rise, in a statement that will boost investors’ confidence that borrowing costs will rise in May.

* The number of Americans filing for unemployment benefits rose just marginally last week, suggesting strong job growth in March that should underpin consumer spending.

* A Cypriot investor signed a $4.2 billion deal on Thursday to develop a platinum mine and refinery in Zimbabwe, an investment that President Emmerson Mnangagwa said showed the country was “open for business”.

Reporting by Eileen Soreng in Bengaluru; editing by Richard Pullin

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