PRECIOUS-Gold climbs on fresh trade tensions, Fed rate cut bets

* Gold up nearly 0.9% so far this week
* Dollar on track for weekly loss
* Spot gold biased to break support at $1,404/oz- technicals

(Updates prices)
By Brijesh Patel
July 12 (Reuters) - Gold prices rose on Friday and were on
track to post a weekly gain, consolidating above $1,400 as
renewed Sino-U.S. trade tensions amid global growth jitters and
prospects of an interest rate cut by the U.S. Federal Reserve
stoked safe-haven demand.
Spot gold XAU= was up 0.6% at $1,411.67 per ounce as of
0728 GMT. Gold has risen nearly 0.9% so far this week.
U.S. gold futures GCv1 gained 0.3% to $1,411.30 an ounce.
"We have a slightly weaker U.S. dollar, tensions in the
Middle East and once again, prolonged trade dispute between the
U.S. and China, which are all supportive," said Michael
McCarthy, chief market strategist, CMC Markets.
Fed Chair Jerome Powell indicated on Thursday that a rate
cut is likely at the Fed's next meeting as businesses slow
investment due to trade disputes and a global growth slowdown.
Meanwhile, U.S. President Donald Trump said China was not
living up to promises it made on buying agricultural products
from American farmers. The trade spat has spilled over to global markets and
exacerbated economic jitters, with weak economic data from
Singapore becoming the latest indicator of this trend.
Investors will now scan trade and lending data from China on
Friday for confirmation on the fallout of the dispute, with the
world's second-largest economy expected to have slowed to its
weakest pace in at least 27 years. Adding to global uncertainties, Iran's alleged attempt to
block a British-owned tanker heightened tensions in the Middle
East in the wake of attacks on tankers and the downing of U.S.
drone by Iran in June. Gold is considered a safe investment during political and
financial uncertainty.
Also, a slightly weaker dollar .DXY was helping gold's
case, making the metal cheaper for investors holding other
currencies. U.S. unit was heading for weekly decline after
surging more than 1% last week. USD/
However, the dollar did regain some ground, after data on
Thursday indicated a pick-up in underlying inflation in the
U.S., along with a solid weekly jobs report, which reduced
expectations of a more aggressive 50 basis point cut at the
Fed's July 30-31 meeting. "Stronger inflation data has had an impact on expectations
of a rate cut, but it hasn't changed the direction," said
McCarthy.
Lower interest rates would support gold because they reduce
the opportunity cost of holding non-yielding bullion.
On the technical side, spot gold is biased to break a
support at $1,404 per ounce and retrace to the next support at
$1,387, according to Reuters technical analyst Wang Tao.
Among other precious metals, silver XAG= rose 0.3% to
$15.16 per ounce and platinum XPT= gained 0.7% to $826.
Palladium XPD= fell 0.2% to $1,557.50 an ounce, edging
away from a 16-week peak touched in the previous session.