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PRECIOUS-Gold jumps as possible global trade war shakes markets

Published 2018-03-23, 01:56 p/m
© Reuters.  PRECIOUS-Gold jumps as possible global trade war shakes markets
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* U.S. tariffs could hit up to $60 bln of Chinese goods

* Trump signs spending bill, but after veto threat

* Global stocks, U.S. dollar fall

* Gold up 2.8 percent this week

* Platinum's discount to gold at highest since 1985 (Updates prices, headline; adds comment, additional byline NEW YORK to dateline)

By Renita D. Young and Peter Hobson

NEW YORK/LONDON, March 23 (Reuters) - Gold prices surged to a one-month high on Friday as the threat of a global trade war sent investors scrambling for safe assets.

U.S. President Donald Trump signed a memorandum that could impose tariffs on up to $60 billion of imports from China, prompting Beijing to urge the United States to "pull back from the brink". tariffs have a 30-day consultation period, leaving room for compromise, but investors are concerned that a trade war could develop with potentially dire consequences for global growth.

Spot gold XAU= gained 1.6 percent at $1,349.56 per ounce by 1:33 p.m. ET (1733 GMT), having hit its highest since Feb. 19 at $1,350.20.

U.S. gold futures GCcv1 for April delivery settled up $22.50, or 1.7 percent, at $1,349.90 per ounce.

Global markets were further rattled by Trump's appointment of John Bolton as national security adviser. Bolton has previously advocated using military force against North Korea and Iran. MKTS/GLOB

Adding to the turmoil, there was a period of suspense on Friday after Trump threatened to veto the $1.3 trillion spending bill passed by Congress, raising the specter of a government shutdown. He later signed the bill. U.S. dollar and U.S. bond yields were also lower. USD/ US/

"There are tensions all over the place. There's the U.S. tensions, Trump and Congress clearly clashing with a lot of disagreements. The fact that gold has not really attracted much interest during this whole period finally caught up today," said Bill O'Neill, partner at Logic Advisors.

Gold is traditionally seen as a safe place to park assets in times of uncertainty.

Dollar-denominated bullion is also helped by a weaker U.S. currency and by lower bond yields, which make non-yielding gold more attractive to investors.

Gold prices began rising strongly this week after the U.S. Federal Reserve gave guidance on the pace of interest rate rises that was less aggressive than some investors had expected. interest rates push up bond yields and tend to strengthen the dollar, so a slower pace of increases to interest rates is good for gold prices.

Gold was up 2.8 percent this week, the biggest weekly gain since April 2016.

"The market is now looking once again to the key area of $1,360-$1,370, the maximum reached by gold in the past four years," said ActivTrades analyst Carlo Alberto De Casa.

Meanwhile, silver XAG= gained 1.4 percent at $16.59 an ounce, its highest since March 9, up 1.5 percent this week.

Platinum XPT= rose 0.3 percent at $950.20, set for a weekly gain of 0.7 percent.

Palladium XPD= lost 0.4 percent at $976.30 per ounce, down 2 percent on the week.

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