PRECIOUS-Gold falls as dollar, equities gain on U.S.-China truce

(Updates prices)
* Dollar hits more than one-week high
* Gold breaks below $1,400 per ounce
* SPDR Gold holdings fall 0.2% on Friday
* Platinum off six-week highs

By Diptendu Lahiri
July 1 (Reuters) - Gold slid by as much as 2% on Monday as
the dollar rallied and investors flocked to higher-risk assets
after the agreement to resume of trade talks between the United
States and China.
Spot gold XAU= was down 1.66% to $1,385.75 per ounce at
1:46 p.m. EDT (1746 GMT), after earlier falling to $1,381.51,
its lowest since June 20.
U.S. gold futures GCv1 settled 1.7% lower to $1,389.30
per ounce.
The United States and China agreed on Saturday to resume
trade negotiations after President Donald Trump offered
concessions to his Chinese counterpart Xi Jinping when the two
met on the sidelines of the G20 summit in Japan. The news spurred a rally in global stocks and sent the
dollar index .DXY to the highest in more than a week, limiting
flows into safe-haven bullion. MKTS/GLOB
"Under the positive (geopolitical) circumstances, the dollar
is rallying and that is having a negative effect on gold. ...
The poor picture on the technical charts is also causing some
additional selling today," said Rob Lutts, chief investment
officer at Cabot Wealth Management.
A break below $1,350 per ounce could paint a bearish
picture, he added.
Gold prices hit a six-year high last week at $1,438.63 an
ounce, driven by a dovish outlook from major central banks and
an escalation of tensions between the United States and Iran.
The metal has shed about $50 since it broke the $1,400
threshold, but some analysts see it as a healthy correction and
an opportunity to buy.
"We do not expect gold to fall significantly further. In our
view, it is above all the upcoming European Central Bank and Fed
rate cuts, and the political risks, that argue against any
pronounced and lasting price slide," Commerzbank analysts said
in a note.
Meanwhile, holdings of the SPDR Gold Trust GLD , the
world's largest gold-backed exchange-traded fund, fell 0.22% on
Friday. Holdings had still risen nearly 7% in June as of last
week. GOL/ETF
Among other precious metals, silver XAG= fell 1.1% to
$15.14 per ounce, while palladium XPD= rose 0.68% to $1,548.51
per ounce. Platinum XPT= inched down 0.66% to $827.50, after
hitting a six-week high of $846.11 per ounce earlier in the
session.