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PRECIOUS-Gold slips to more than 1-week low as Mexico tariff reprieve boosts equities

Published 11/06/2019, 10:33 pm
© Reuters. PRECIOUS-Gold slips to more than 1-week low as Mexico tariff reprieve boosts equities
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* Gold pulls back from last week's 14-month high

* Dollar steady near 2-1/2 month lows

* Palladium trading near six-week high

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl (Adds quote, updates prices)

By Eileen Soreng

June 11 (Reuters) - Gold fell to a more than one-week low on Tuesday as the United States halted its plans to impose tariffs on Mexico, boosting appetite for riskier assets like equities at the expense of alternatives like bullion.

Spot gold XAU= was down 0.5% at $1,321.31 per ounce by 1210 GMT, having earlier hit its lowest since June 3 at $1,319.35. U.S. gold futures GCv1 fell 0.4% to $1,324.1 an ounce.

Concerns over global trade and expectations the Federal Reserve would cut U.S. interest rates sent spot prices to their highest since April 2018 last week at $1,348.08.

Bullion lost more than 1% on Monday after markets took heart from a deal between the United States and Mexico to avert yet another tariff war. U.S. Secretary of State Mike Pompeo also warned the U.S. could still slap tariffs on Mexico if not enough progress was made on its commitment to stem illegal immigration. outlook for the world economy has not changed and that leads us to believe that the upside is still intact, but the (gold) market needs weaker stocks and a weaker dollar to see that through," Saxo Bank commodity strategist Ole Hansen said.

"Right now stocks are not weakening and that's creating profit-taking," he said. "The continued recovery in stocks is leading to recent established longs (in gold) being closed."

World shares rose after the latest trade news, though U.S. President Donald Trump said he was ready to impose another round of tariffs on Chinese imports if he cannot make progress in trade talks at a Group of 20 summit later this month. MKTS/GLOB also held above key technical levels as rising expectations for a U.S. rate cut kept the dollar .DXY pegged near a 2-1/2 month low against a basket of major currencies. USD/

Market focus is now on the Fed's June 18-19 policy meeting and what kind of signals the central bank could provide regarding monetary policy direction.

"The communication (from the Fed) recently has been quite dovish so if they do not continue in that momentum, then we will probably see a bit more downside on gold prices," said ABN AMRO (AS:ABNd) analyst Georgette Boele.

Among other precious metals, silver XAG= was steady at $14.66 per ounce, while platinum XPT= was up 0.1% to $802.89 an ounce.

Palladium XPD= rose 0.3% to $1,386.75 per ounce after hitting a more than one-month high of $1,393.53 in the previous session.

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