PRECIOUS-Gold prunes gains on reconciliatory trade comments, profit-booking

* Speculators increase net longs in COMEX gold
* Gold may peak $1,546-$1,569/oz range -techs

(Adds fresh comment, recasts story)
By Harshith Aranya
Aug 26 (Reuters) - Gold prices erased early gains on Monday,
slipping from a six-year high touched during the session, as
some of the safe-haven demand waned after the United States and
China indicated a possible de-escalation of trade war, that also
led to some profit-taking.
Spot gold XAU= rose 0.1% to $1,527 per ounce as of 0822
GMT, after hitting $1,554.56 an ounce earlier, its highest since
April 2013.
The bullion had hit this level after tit-for-tat tariffs by
the U.S. and China escalated trade tensions, and boosted demand
for safe-haven assets.
U.S. gold futures GCcv1 were also up 0.1% at $1,538.70 an
ounce.
"The main news is (U.S. President Donald) Trump has
commented that he is ready to negotiate with China, and China
has also said they want a deal to happen," said Renisha
Chainani, head of commodity and currency research at Monarch
Networth Capital in Ahmedabad, India.
"This has changed the sentiment in the market from risk-off
to risk-on, and safe haven assets are seeing some profit
booking. This is a knee-jerk reaction."
Trump said on Monday China had contacted U.S. trade
officials overnight to say they wanted to return to the
negotiating table. Earlier, Chinese Vice Premier Liu He had said that China
opposes the escalation of the trade conflict, a state-backed
newspaper reported. On Friday, Trump had announced a 5% additional duty on $550
billion in targeted Chinese goods, hours after Beijing unveiled
retaliatory tariffs on $75 billion worth of U.S. products.
Equity markets plunged in response, with the U.S. stocks
slumping on Friday, followed by a steep fall across Asian shares
on Monday. MKTS/GLOB
On Friday, Fed Chair Jerome Powell said the U.S. central
bank will "act as appropriate" to keep the economy healthy,
although he stopped short of committing to rapid-fire rate cuts.
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. FEDWATCH
Yields on 10-year Treasury notes US10YT=RR dived to its
lowest since mid-2016, from a top of 1.66% on Friday. US/
Lower bond yields reduce the opportunity cost of holding
non-interest bearing gold.
The dollar index .DXY , which measures the greenback's
value against a basket of six major currencies, was up 0.3%.
USD/
Spot gold may peak in a range of $1,546-$1,569 per ounce,
said Reuters technical analyst Wang Tao. Indicative of market sentiment, SPDR Gold Trust GLD , the
world's largest gold-backed exchange-traded fund, said its
holdings rose 0.58% to 859.83 tonnes on Friday. GOL/ETF
Hedge funds and money managers increased their bullish
stance in COMEX gold in the week to Aug. 20, the U.S. Commodity
Futures Trading Commission said on Friday. Elsewhere, silver XAG= was up 0.9% at $17.54 per ounce and
platinum XPT= also gained 0.9% to $861.
Palladium XPD= climbed 0.9% to $1,473.70 per ounce.

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