GLOBAL MARKETS-Oil up on Iran tensions, stocks hover at seven-week highs

* Gold at near six-year highs after big week
* Potential military strikes in Middle East worry markets
* Investors digest possible wave of central bank easing
* Government yields edge up; dollar index falls

(Updates with opening of U.S. markets; changes byline,
dateline, previous LONDON)
By Lewis Krauskopf
NEW YORK, June 21 (Reuters) - Oil prices built on recent
gains on Friday on fears any U.S. military attack on Iran would
disrupt flows from the Middle East, while increases on Wall
Street kept a gauge of global stock markets near seven-week
highs.
Gold prices climbed to near six-year highs and were on track
for their best week in three years.
Central banks have dominated economic news this week, with
the Federal Reserve signaling the potential for a U.S. interest
rate cut later this year and the European Central Bank hinting
at stimulus measures. MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.02%, as Wall Street's main indexes climbed in morning
trading a day after the benchmark S&P 500 notched a record high.
U.S. stocks picked up steam after a Wall Street Journal
report said U.S. Vice President Mike Pence will postpone his
planned speech on China policy next week to avoid stoking
additional tensions ahead of President Donald Trump's planned
meeting with Chinese President Xi Jinping next week.

Concerns about a trade war between the two countries
undermining the global economy have clouded the outlook for
markets.
On Wall Street, the Dow Jones Industrial Average .DJI rose
120.37 points, or 0.45%, to 26,873.54, the S&P 500 .SPX gained
6.78 points, or 0.23%, to 2,960.96 and the Nasdaq Composite
.IXIC added 10.94 points, or 0.14%, to 8,062.28.
The pan-European STOXX 600 index .STOXX lost 0.33%.
Trump said he had aborted a military strike on Iran because
such a response to Tehran's downing of an unmanned U.S.
surveillance drone would have caused a disproportionate loss of
life. Spot gold XAU= added 0.5% to $1,394.31 an ounce,
surpassing the key $1,400 level during the session. "There is a perfect mix of ingredients for gold's rush to
the top – a weak macroeconomic environment, low bond yields,
soft dollar and rising geopolitical tensions," said Howie Lee,
an economist at OCBC Bank.
Oil futures rallied on fears of a disruption to flows in the
Middle East, which provides more than a fifth of the world's oil
output.
"A lot of the oil produced in the world comes from very
troubled areas, and occasionally we get reminders of that," said
Gene McGillian, vice president at Tradition Energy in Stamford,
Connecticut.
U.S. crude CLcv1 rose 0.67% to $57.45 per barrel and Brent
LCOcv1 was last at $65.09, up 0.99% on the day. Government bond yields in the United States and Europe edged
higher but remained near record or multi-year lows after the
dovish statements from the central banks.
Benchmark 10-year U.S. Treasury notes US10YT=RR last fell
18/32 in price to yield 2.0609%, from 2.001% late on Thursday.
The dollar index .DXY , which measures the greenback
against a basket of currencies, fell 0.1%, with the euro EUR=
up 0.27% to $1.1321.
The yen rose to a five-month high versus the dollar JPY=
during the session on growing tensions between Iran and the
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Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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