June 14, 2019 / 1:33 AM / 12 days ago

PRECIOUS-Gold hits 1-wk high on Fed rate cut expectations, Middle East tensions in focus

June 14(Reuters) - Gold prices rose to their highest in a week on Friday, supported as weak U.S. economic data stoked expectations the Federal Reserve would cut interest rates.

Investors were also keeping a close eye on tensions in the Middle East after attacks on tankers there stoked U.S.-Iran tensions and raised concerns over supply flows through one of the world’s main sea lanes.

Demand for gold often increases during times of political or economic uncertainty as it is widely viewed as a safe-haven asset.

FUNDAMENTALS

* Spot gold was up 0.1% at $1,342.69 as of 0104 GMT, after hitting its highest since June 7 at $1,344.94.

* U.S. gold futures rose 0.3% to $1,347.20 an ounce.

* The number of Americans filing applications for unemployment benefits unexpectedly rose last week, adding to concerns about U.S. labour market after job growth slowed sharply in May.

* Other data showed U.S. import prices fell by the most in five months in May in the latest indication of muted inflation pressures, adding to expectations the Fed will cut rates this year.

* Increased expectations of rate cuts pulled short-dated U.S. Treasury yields lower on Thursday, steepening the yield curve ahead of Friday’s retail sales data and the Fed’s meeting next week.

* The United States blamed Iran for the attacks on two oil tankers in the Gulf of Oman on Thursday that drove up oil prices and raised concerns about a new U.S.-Iranian confrontation, but Tehran bluntly denied the allegation.

* President Donald Trump’s top economic adviser said the economic burden of a trade war between the world’s two largest economies will shift to China, rather than the United States.

* Meanwhile, China’s commerce ministry said Beijing will not yield to any “maximum pressure” from Washington, and any attempt by the United States to force China into accepting a trade deal will fail.

* The dollar index, which tracks the greenback against six major currencies, was steady on Friday.

* Asian stocks held their ground on Friday after Wall Street gained.

DATA AHEAD (GMT)

* 1030 Russia Central Bank Key Rate June (Reporting by Brijesh Patel in Bengaluru; Editing by Joseph Radford)

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