PRECIOUS-Gold gains on U.S.-China trade jitters; heads for best month in 3 years

* Bullion up nearly 8.4% this month
* Silver heading for biggest monthly gain since December
* Palladium set for best month in 2-1/2 years

(Updates prices)
By Sethuraman N R
June 28 (Reuters) - Gold prices edged up on Friday amid
doubts a highly anticipated meeting between the United States
and China would ease trade tensions, driving bullion to its best
month in three years.
Spot gold XAU= was up 0.4% at $1,414.24 per ounce at 1133
GMT. Gold has risen nearly 8.4% so far this month, on track for
its biggest monthly percentage gain since June 2016.
The metal is also set to post its sixth consecutive weekly
rise, having gained 1.1% so far this week.
U.S. gold futures GCv1 climbed 0.4% to $1,417.40.
White House economic adviser, Larry Kudlow said U.S.
President Donald Trump had agreed no preconditions for his
high-stakes meeting with China's President Xi Jinping and is
maintaining his threat to impose new tariffs on Chinese goods.

"Doubts about the success of the meeting between the two
leaders have been weighing on risky assets; that is positive for
gold," said Quantitative Commodity Research analyst Peter
Fertig.
The leaders of the Group of 20 countries meet on Friday and
Saturday in Osaka, Japan, with a meeting between Trump and Xi
scheduled for Saturday.
The trade tensions weighed on equity markets, boosting the
appeal of safe-haven bullion. MKTS/GLOB
The dollar index .DXY declined 0.1% after coming close to
a one-week high in the previous session, making bullion cheaper
for buyers in other currencies. USD/
"There have been signals from the recent Federal Open Market
Committee on rate cuts. Real yields on government bonds have
been falling, which is positive for precious metals along with
the weakening U.S. dollar. The outlook for gold looks positive
from the fundamental side," Fertig said.
Gold prices have gained more than $80 in the last two weeks,
mainly on expectations that there will be at least a quarter
percentage point rate reduction in July by the Fed. "The sustained decline in rates is a key factor (for gold),
particularly as the Fed shifts to a more dovish stance," UBS
analysts said in a note, raising their three-month gold price
target to $1,430 from $1,380.
"Uncertainty around growth and trade risks suggests more
strategic positions are likely to be built."
Meanwhile, holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, fell 0.3% to 795.80 tonnes on
Thursday, from Wednesday. However, holdings have still gained
more than 7% this month. GOL/ETF
Silver XAG= inched down 0.2% to $15.22 per ounce, but was
on track for its first monthly gain in five.
Palladium XPD= fell 0.7% to $1,537.20 an ounce. However,
the auto-catalyst metal has risen more than 16% so far this
month, its biggest monthly percentage gain since November 2016.
Platinum XPT= was up 0.6% at $816.24.