(Updates to close of U.S. markets)
* Stocks rebound after tough Asian session
* Offshore yuan hits record low before partial recovery
* Gold eases from six-year high; yen falls
* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh
By April Joyner
NEW YORK, Aug 26 (Reuters) - A global gauge of equities edged higher on Monday and the dollar rebounded after U.S. President Donald Trump said Chinese officials had contacted Washington about resuming trade negotiations.
His remarks appeared to restore some equilibrium following signs of escalation in the U.S.-China trade dispute that had roiled markets earlier in the day.
Trump's comments after the G7 summit of world leaders in France followed Chinese Vice Premier Liu He's remarks that China was willing to resolve the trade dispute through "calm" negotiations. Beijing, however, declined to confirm that Chinese officials had contacted their U.S. trade counterparts.
U.S. stocks rose more than 1% on the easing of rhetoric between Washington and Beijing, while European stocks recovered most of their early losses. As investors returned to riskier assets, U.S. Treasury yields bounced off session lows, while the Japanese yen reversed course to trade lower against the dollar and gold eased from a six-year high.
The dollar index also shed losses to trade higher, last rising 0.4%. The Chinese yuan, which had fallen to an 11-year low in the onshore market and hit a record low in the offshore market, pared losses. In the offshore market, the Chinese yuan was last down 0.5% at 7.1683 per dollar.
"Everything changed on a dime when President Trump talked about meeting with the Chinese again," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta.
Asian equity markets plummeted and European stocks had appeared set to follow suit after China and the United States announced further tariffs on each other's exports on Friday. Trump had announced an additional duty on some $550 billion of targeted Chinese goods, following the U.S. market close, hours after China unveiled retaliatory tariffs on $75 billion worth of U.S. goods.
Another development at the G7 summit pressured oil prices, as French President Emmanuel Macron said preparations were underway for a meeting between Iranian President Hassan Rouhani and Trump in the coming weeks to find a solution to their nuclear standoff. The prospect of a deal between Washington and Tehran bolstered the outlook for increased supply of Iranian crude.
U.S. crude settled 53 cents lower, or 0.98%, at $53.64 a barrel, while Brent settled 64 cents lower, or 1.08%, at $58.70 a barrel.
On Wall Street, the Dow Jones Industrial Average rose 269.93 points, or 1.05%, to 25,898.83, the S&P 500 gained 31.27 points, or 1.10%, to 2,878.38 and the Nasdaq Composite added 101.97 points, or 1.32%, to 7,853.74.
The MSCI All-Country World Index gained 0.30%.
Even with Monday's gains in equities, some market watchers remained cautious on the extent of progress in U.S.-China trade relations. Peter Kenny, founder of Kenny's Commentary LLC and Strategic Board Solutions LLC in New York, noted that the advance in U.S. stocks came in relatively thin trading volume.
"This is not a healthy bounce, and it is across virtually all the major indexes, so it is an indication the momentum for U.S. equities remains biased to the downside," Kenny said.
Benchmark 10-year Treasury notes last fell 4/32 in price to yield 1.5401%, from 1.527% late on Friday. The yield curve between two-year and 10-year Treasuries inverted as an upcoming auction of two-year notes on Tuesday gave a further boost to shorter-dated yields.
The safe-haven Japanese yen fell 0.7% to 106.09 against the dollar after having rallied to a seven-month high.
Spot gold rose 0.15% to $1,528.35 an ounce.
Reporting by April Joyner; Additional reporting by Kate Duguid and Chuck Mikolajczak in New York, Akanksha Rana in Bangalore, and Tommy Wilkes and Dhara Ranasinghe in London; Editing by Steve Orlofsky, Leslie Adler and Dan Grebler