PRECIOUS-Gold firms near 3-month peak on slowdown fears, Fed rate views

* SPDR posts best one-day percentage gain in nearly 3 years
* Platinum hits two-week high
* U.S. Fed rate cut bets rise after weak U.S. data

(Adds comment, updates prices)
By Brijesh Patel
June 4 (Reuters) - Gold prices edged up on Tuesday, hovering
near a three-month high hit in the previous session, as global
slowdown worries driven by trade conflicts amid expectations of
a U.S. interest rate cut stoked investors towards the safe-haven
bullion.
Spot gold XAU= was up 0.2% at $1,326.85 per ounce, as of
0703 GMT, after touching its highest since Feb. 27 at $1,327.90
in the previous session.
U.S. gold futures GCv1 were up 0.3% at $1,331.30 an ounce.
"Weak sentiment around the breakdown in U.S.-China trade
relationship has seen investors seek safe-haven assets," ANZ
analyst Daniel Hynes said.
Also, "weakness in equity markets and clearly the
indications of a rate cut in the U.S. has seen gold come to
fore, which has driven investors back into to the gold market."
U.S. Secretary of State Mike Pompeo said on Monday the
United States is seeking to "level the playing field" with China
after decades of unfair trade practices, but his Dutch
counterpart said tariffs would hurt international trade.
The prolonged trade war between the world's biggest
economies has rolled over financial markets denting risk
sentiment among investors. Global stock markets shed over $2
trillion in value in May. MKTS/GLOB Lingering global trade uncertainty is weighing upon equity
markets and is likely to see participants move into safe-haven
assets, MKS PAM Group said in a note.
"This is likely to drive gold higher over the near-term,
with initial targets extending toward $1,330 and beyond the
February high of $1,346.80, while the short-term key for the
metal will be the continued ETF and hedge fund interest."
Holdings of SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, rose 2.2% on Monday, its
biggest one-day percentage gain since July 2016, as investors
spooked by global slowdown fears sought safe havens. GOL/ETF
Meanwhile, U.S. manufacturing growth slowed further in May
to its weakest pace of activity in more than two-and-a-half
years, a data showed on Monday. A gloomy economic outlook prompted traders to increase bets
that the U.S. Federal Reserve will cut interest rates sooner
than expected.
Adding to the sentiment, U.S. Treasury yields slipped to
their lowest levels since September 2017 following remarks from
St. Louis Federal Reserve President James Bullard who said a
U.S. rate cut may be "warranted soon" because of global trade
tensions and weak U.S. inflation. Lower interest rates would support gold because they reduce
the opportunity cost of holding non-yielding bullion.
Silver XAG= was steady at $14.78 per ounce after touching
a more than two-week high of $14.83 on Monday.
Platinum XPT= edged 0.2% higher to $821.88 per ounce after
hitting a two-week high of $825.78, while palladium XPD= fell
0.4% to $1,318.75 per ounce.