NEW YORK/LONDON, July 6 (Reuters) – Gold fell on Friday, but bounced off session lows as the dollar weakened and equities rose, yet bullion was on track for a small weekly gain amid escalating U.S.-Sino trade tensions. The dollar fell after data showed the U.S. unemployment rate increased and wages grew less than forecast in June even as the economy created more jobs than expected.
Wage growth is a closely watched signal of potential inflation that could prompt more interest rate hikes by the Federal Reserve. A weak dollar tends to lift gold, making the greenback-priced metal cheaper for non-U.S. investors. U.S. tariffs on $34 billion worth of Chinese goods took effect on Friday, while China’s commerce ministry retaliated with 25 per cent tariffs on $34 billion worth of U.S. imports. The markets absorbed imposition of the tariffs calmly, with stocks edging higher. Rising stock markets pressure gold prices by reducing safe-haven demand for the precious metal. Spot gold was down 0.2 per cent at $1,254.45 by 1:35 p.m. EDT (1735 GMT), off the session low of $1,252.15 and headed for its first weekly gain in four weeks. U.S. gold futures GCcv1 for August delivery settled down $3, or 0.2 per cent, at $1,255.80 per ounce ». On Thursday, minutes of the Federal Reserve’s June 12-13 policy meeting showed that U.S. central bankers expressed concerns global trade tensions could hit an economy perceived as strong. India’s gold imports fell for a sixth month in June to 44 tonnes, provisional industry data showed. Gold-backed exchange-traded funds (ETFs) saw outflows in North America and Asia, but saw inflows in Europe during June, the World Gold Council said. Silver gained 0.2 per cent at $16.01 an ounce, and platinum fell 0.1 per cent to $841.24, both heading for a 0.3 per cent weekly drop. Palladium slipped 0.2 per cent at $949.95 an ounce, on track for a 0.1 per cent weekly drop. All three metals were headed for their fourth straight weekly decline.