* Speculators raise net longs in COMEX gold in late May
* SPDR Gold holdings gain 0.3% on Friday to 743.21 T
* Investors raise bets on U.S. Federal Reserve rate cut
(Updates prices)
By Arijit Bose
June 3 (Reuters) - Gold prices rose on Monday to their
highest in more than two months on worries that U.S.-Chinese
trade tensions and Washington's threat of tariffs on Mexico
would hurt the global economy.
Spot gold XAU= rose almost 1% higher to $1,317.53 per
ounce at 1207 GMT, after touching its highest since March 27 at
$1,318.10.
U.S. gold futures GCcv1 rose 0.9% to $1,322.40 an ounce.
Ross Norman, chief executive at Sharps Pixley, said concerns
over tariffs had driven investors to safe havens.
"Gold has also cruised pretty seamlessly across important
levels such as $1,293 and $1,300," he said adding that crossing
these technical barriers boosted the metal's momentum further.
U.S.-Chinese relations slid further downhill when the two
countries clashed at the Shangri-La Dialogue in Singapore due to
security disputes over Taiwan and the South China Sea.
U.S. stock futures, Asian and European share markets and oil
prices slipped to multi-month lows on Monday as investors turned
to government bonds, the yen, the Swiss franc and gold.
MKTS/GLOB
Factory activity contracted across Asia and Europe last
month as the trade row between the United States and China
raised fears of a global economic downturn and heaped pressure
on policymakers to roll out more stimulus. The gloomy outlook prompted traders to increase bets that
the U.S. Federal Reserve would cut interest rates sooner rather
than later.
"Gold finally behaved like a safe haven last week, breaking
out higher after the trade war escalation led to a code red for
global growth," Edward Moya, senior market analyst at OANDA,
said in a note.
Gold prices surpassed the key $1,300 level for the first
time since April on Friday after being stuck in a nearly $20
range for weeks.
Hedge funds and money managers increased their net long
positions in COMEX gold in the week to May 28, data
showed.
Holdings of SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, rose 0.32 percent to 743.21
tonnes on Friday from Thursday. GOL/ETF
Spot gold may test a resistance at $1,315 per ounce, a break
above which could lead to a gain into the range of
$1,321-$1,330, according to Reuters technical analyst Wang Tao.
In other precious metals, silver XAG= rose 0.9% to $14.70
per ounce. The metal touched an almost three-week high of $14.72
earlier in the session.
Palladium XPD= rose 1% to $1,338.35 per ounce, while
platinum XPT= was 1.5% higher at $803.65 per ounce, having
touched a one-week high at $806.33 earlier in the session.
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