August 27, 2019 / 2:00 AM / 23 days ago

PRECIOUS-Gold steady as markets seek clarity on trade war direction

Aug 27 (Reuters) - Gold prices traded steady on Tuesday, after retreating from an over six-year peak hit in the previous session, as U.S. President Donald Trump predicted a trade deal with China and calmed global markets that have been rattled by new tariffs.

FUNDAMENTALS

* Spot gold was up 0.1% to $1,528.10 per ounce, as of 0125 GMT.

* Gold prices on Monday surged to their highest in more than six years, surpassing the $1,550 mark in early trade, before paring gains after Washington and Beijing indicated a ramping down of their trade spat.

* The bullion is often seen as an alternative investment during times of political and financial uncertainty.

* U.S. gold futures were flat at $1,537.50 an ounce.

* U.S. President Donald Trump on Monday flagged the possibility of a trade deal with China, and said he believed Beijing was sincere in its desire to reach an agreement.

* Chinese Vice Premier Liu He, who has been leading the talks with Washington, said on Monday that China opposed any escalation in trade tensions.

* Global markets had been roiled at the start of the week by new tariffs from the world's two largest economies.

* The benchmark 10-year U.S. Treasury yield pulled back from a three-year low, which it reached on Monday on the back of widespread risk-off sentiment.

* The dollar index, which measures the greenback's value against a basket of six major currencies, rose about 0.5% overnight.

* The markets are fully priced for a quarter-point cut in rates next month, and over 100 basis points of easing by the end of next year.

DATA AHEAD (GMT)

* 0600 Germany GDP Detailed QQ SA Q2

* 0600 Germany GDP Detailed YY NSA Q2

* 0645 France Business Climate Mfg Aug

* 1400 US Consumer Confidence Aug (Reporting by Harshith Aranya in Bengaluru, Editing by Sherry Jacob-Phillips)

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