PRECIOUS-Gold steadies near 1-month peak as trade woes lift safe-haven demand

* SPDR Gold holdings sees best one-day gain in nearly 2
months
* Spot gold notches up best one-day pct gain since Feb on
Monday

(Updates prices, adds comment)
By Sethuraman N R
May 14 (Reuters) - Gold prices held near one-month highs on
Tuesday as an escalation in the Sino-U.S. trade dispute sent
investors looking for safe-haven assets.
Spot gold XAU= was trading steady at $1,298, as of 0737
GMT, after hitting $1,303.26, its highest since April 11.
U.S. gold futures GCcv1 were down 0.2% at $1,299.40.
Asian shares extended losses on Tuesday, following sharp
overnight declines in Wall Street, after Beijing on Monday
announced retaliatory tariff-hike to counter Washington.
MKTS/GLOB
"People are looking to find a safe harbour in the storm
while they wait for the dust to settle," said Jeffrey Halley,
senior market analyst, Asia Pacific at OANDA.
"Prices could further rise to $1,310-$1,312 if stock markets
end lower. But, any sudden breakthroughs in the trade stand-off
possibly could see investors stampeding for the exit as fast as
they arrived."
On Monday, the metal rose 1.1% to mark its biggest one-day
percentage rise since February 19. Prices broke through multiple
technical resistances, which had acted as a barrier for bullion
despite the slump in global markets over the past week.
The biggest trigger for gold came on Monday after China
announced that it would impose higher tariffs on a range of U.S.
goods, which followed Washington's decision last week to hike
its own levies on $200 billion in Chinese imports. There was some profit-taking in Asia as prices rose above
$1,300, MKS PAMP Group said in a note.
"While there remains a high level of uncertainty over the
U.S.–China trade negations, bullion should remain supported and
requires a consolidated move above $1,305 to entice further
length back into the market."
In addition to more tariffs, traders are concerned that
China, the largest foreign U.S. creditor, may dump treasuries to
counter the Trump administration's hardening trade stance.
Besides trade worries, gold investors were also keeping a
tab on escalating tensions between the United States and Iran
after Saudi Arabia said on Monday that two of its oil tankers
were among those attacked off the coast of the United Arab
Emirates. "The Middle East escalation news brings us a step closer to
a significant U.S. military reprisal. Fears that China will
weaponise U.S. Treasuries in trade war retaliation is scaring
the daylights out of markets even if it is unlikely," said
Stephen Innes, head of trading and market strategy at SPI Asset
Management.
Rise in investor interest in bullion was also evident after
holdings of SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, rose 0.44% on Monday, its
biggest one-day rise in nearly two months.
Among other precious metals, silver XAG= edged 0.2% higher
to $14.79 per ounce, while platinum XPT= rose 0.4% to $856.20.
Palladium XPD= climbed 0.5% to $1,329.87.