PRECIOUS-Gold hits 1-week high on simmering U.S.-China trade spat

* Money managers cut net longs in gold in week to May 21-
CFTC
* Gold may retest resistance at $1,290 - analyst

(Updates prices)
By Arijit Bose
May 27 (Reuters) - Gold prices touched a more than one-week
high on Monday as fears of a protracted U.S.-China trade war
hurt risk sentiment, while poor economic data from the United
States bolstered bets of a U.S. Federal Reserve rate cut.
Spot gold XAU= edged 0.1% higher to $1,286.21 per ounce as
of 0714 GMT. Earlier in the session, the metal touched
$1,287.32, its highest since May 17.
U.S. gold futures GCcv1 gained 0.2%, to $1,285.60 an
ounce.
"Gold has really reversed earlier losses as risk appetite in
the market remains rather shaky," said Benjamin Lu, an analyst
with Singapore-based Phillip Futures.
"U.S. sanctions on Huawei and even the rest of the Chinese
technology firms have really aggravated trade tensions."
China on Friday denounced U.S. Secretary of State Mike
Pompeo for fabricating rumours after he said the chief executive
of China's Huawei Technologies Co Ltd HWT.UL was lying about
his company's ties to the Beijing government. A string of weak data from the United States late last week
stirred up concerns that its protracted trade-war with China has
started taking a toll on the country's economy, and promoted
bets for a much expected rate cut by the Federal Reserve. Over the weekend, U.S. President Donald Trump repeated a
complaint that the Federal Reserve's policies have kept U.S.
economic growth from reaching its full potential. Further uncertainties emerged after British Prime Minister
Theresa May said on Friday she would quit after failing to
deliver Brexit, setting up a contest that will install a new
British prime minister who could pursue a cleaner break with the
European Union. "The rise of volatility triggered by geopolitics benefited
the yellow metal and if the UK political game of thrones and
U.S.-China trade keep uncertainty levels high, gold could once
again jump above $1,300," Alfonso Esparza, senior market analyst
at OANDA, said in a note.
The U.S. dollar .DXY was struggling against a basket of
six major currencies, having fallen off a two-year peak in the
previous session due in part to the U.S.-China trade dispute,
making gold cheaper for holders of non-U.S. currencies. FRX/
Gold may retest a resistance at $1,290 an ounce, a break
above which could lead to a gain to the next resistance at
$1,295, according to Reuters technical analyst Wang Tao.
TECH/C
Meanwhile, hedge funds and money managers sharply reduced
their net long positions in COMEX gold in the week to May 21,
the U.S. Commodity Futures Trading Commission (CFTC) said on
Friday. CFTC/
Among other precious metals, silver XAG= rose 0.3% to
$14.61 per ounce, while palladium XPD= fell 0.4% to $1,329.90.
Platinum XPT= rose 0.3% to $804.50 an ounce.