PRECIOUS-Gold scales near six-year peak on dovish Fed signals

June 21 (Reuters) - Gold prices climbed to a near six-year
high on Friday after the U.S. Federal Reserve indicated earlier
this week that it could cut interest rates as early as July,
prompting a sharp fall in the dollar and U.S. Treasury yields.

FUNDAMENTALS
* Spot gold XAU= was up 0.4% at $1,392.81 per ounce as of
0128 GMT, after hitting its highest since Sept. 5, 2013 at
$1,395.13.
* It was up 4.1% for the week, heading for its biggest
weekly gain since the week ended April 29, 2016.
* U.S. gold futures GCv1 rose 0.1% to $1,398.10 an ounce.
* The Fed said on Wednesday it was ready to battle growing
global and domestic economic risks with interest rate cuts
beginning as early as next month, as it took stock of rising
trade tensions and growing concerns about weak inflation.
* The Bank of Japan kept monetary policy steady but Governor
Haruhiko Kuroda signalled readiness to ramp up stimulus as
global risks cloud the economic outlook, joining U.S. and
European central banks in dropping hints of additional easing.
* Bank of England officials voted unanimously to hold
interest rates despite some recent suggestions from policymakers
that borrowing costs should go up. The BoE cut its economic
growth forecast for Britain to zero in the second quarter.
* U.S. benchmark 10-year Treasury yields on Thursday dropped
below 2% for the first time in more than 2-1/2 years, while
other maturities fell to multi-year lows as well, a day after
the Fed flagged interest rate cuts as early as next month. US/
* The dollar struggled to get on the front foot on Friday,
and was poised for a weekly loss against major currencies after
the Fed joined global peers with plans to cut interest rates to
support flagging economic growth. USD/
* Asian stocks struggled on Friday to track Wall Street's
exuberance about a possible U.S. rate cut next month as anxiety
over Sino-U.S. trade negotiations clouded the investor mood in
the region. MKTS/GLOB
* U.S. President Donald Trump played down Iran's downing of
a U.S. military surveillance drone on Thursday, saying he
suspected it was shot by mistake and "it would have made a big
difference" to him had the remotely controlled aircraft been
piloted. * Focus now shifts to next week's G20 meeting for any
developments between the United States and China regarding their
trade war that has raised concerns about global growth.
* Russia's gold reserves stood at 70.4 million troy ounces
as of the start of June, the central bank said on Thursday.
DATA AHEAD (GMT)

* 0800 EU Markit Mfg, Serv, Comp Flash PMI June
* 1345 US Markit Mfg, Serv, Comp Flash PMI June