PRECIOUS-Gold gains as trade tensions stoke global growth worries

* U.S. Treasury yields dip to lowest since Sept 2017
* SPDR gold holdings fell to 737.34 tonnes on Tuesday
* Dollar nears one-week high
* Platinum drops to more than 3-month low

(Updates prices)
By Brijesh Patel
May 29 (Reuters) - Gold prices gained on Wednesday as
investor concerns grew about a global economic downturn driven
by U.S.-China trade tensions, which also sent U.S. Treasury
yields lower.
Spot gold XAU= rose 0.4% to $1,283.94 per ounce by 1249
GMT, while U.S. gold futures GCv1 were up 0.5% at $1,283.50 an
ounce.
"The 10-year U.S. Treasury yields have dropped to their
lowest in (about) a year-and-half right now, and that seems to
be a function of the fears of a slowdown in the U.S. economy and
the trade war," Mitsubishi analyst Jonathan Butler said.
Global equity markets sank and U.S. Treasury yields dipped
to their lowest since September 2017 as investor sentiment
soured over growing global growth worries. MKTS/GLOB US/
Lower bond yields reduce the opportunity cost of holding
non-interest bearing gold.
Adding to the global anxiety, China's Communist Party
newspaper warned on Wednesday that Beijing was ready to use rare
earths to strike back at the United States in the drawn-out
dispute. This comes two days after U.S. President Donald Trump said
Washington was not yet prepared to strike a deal. Gold also held up well against a relatively stronger dollar,
which has been competing with bullion as the investment of
choice to hedge against the trade tensions, with the U.S.
currency .DXY holding near a one-week high. USD/
The dollar is repeating a trend seen last year, when it
emerged as the preferred hedge over bullion from the trade
concerns between the world's two biggest economies.
"Wider global interest rate differentials between the U.S.
dollar and G-6 currencies have further bolstered the U.S. dollar
strength whilst extending marked pressure on gold in lieu of its
status as a non-interest bearing asset," Phillip Futures said.
Holdings of SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, which is a gauge of investor
interest in the metal, fell 0.2% to 737.34 tonnes on Tuesday
from Friday. GOL/ETF
Among other precious metals, silver XAG= gained 0.8% to
$14.45 per ounce, while palladium XPD= rose 0.6% to $1,344.60
per ounce.
Platinum XPT= fell 0.2% to $793.94 per ounce, after
earlier falling to its lowest since Feb. 15 at $787.