PRECIOUS-Gold rises on Fed rate cut hopes, trade worries

* SPDR Gold holdings rise 0.5% on Wednesday
* Gold may see strong support at $1,330/oz - analyst
* Palladium hits more than one-month high

(Updates prices)
By Brijesh Patel
June 13 (Reuters) - Gold prices advanced on Thursday as
demand for the safe-haven metal rose on expectations of an
interest rate cut by the U.S. Federal Reserve following soft
inflation data, and on escalating trade tensions between the
world's top two economies.
Spot gold XAU= was up 0.3% at $1,337.41 per ounce, as of
0706 GMT. U.S. gold futures GCv1 were also 0.3% higher, at
$1,341.40 an ounce.
"We can see strong support at $1,330 for gold, and the metal
looks to trade upside with expectations of lower interest
rates," said Peter Fung, head of dealing at Wing Fung Precious
Metals.
"Also, we are still worried about the (U.S.-China) trade war
and people are still looking at gold as a safe haven," he said.
Data from the Labor Department showed on Wednesday U.S.
consumer prices barely rose in May, pointing to moderate
inflation that together with a slowing economy increased
pressure on the Federal Reserve to cut interest rates this year.
Fed policymakers are scheduled to meet on June 18-19 against
the backdrop of rising trade tensions, slowing growth and a
sharp step-down in hiring in May which have led financial
markets to price in at least two rate cuts by the end of 2019.
Lower interest rates decrease the opportunity cost of
holding non-yielding bullion and weigh on the dollar, making
gold cheaper for investors holding other currencies.
The dollar index .DXY versus a basket of six major
currencies was down 0.1% on Thursday, having risen more than
0.3% overnight. USD/
On the trade front, U.S. President Donald Trump said he had
a "feeling" a U.S.-China trade deal could be reached, but
reiterated his threat of increasing tariffs on Chinese goods if
there is no agreement.
However, Trump declined to set a deadline for levying
tariffs on another $325 billion of Chinese goods and called the
relationship with Beijing good but "testy" after China walked
back commitments for a trade deal. Meanwhile, holdings of SPDR Gold Trust GLD , the world's
largest gold-backed exchange-traded fund, rose 0.5% to 759.70
tonnes on Wednesday from 756.18 tonnes on Tuesday. GOL/ETF
On the technical side, spot gold is expected to retest a
resistance at $1,339 per ounce, a break above which could lead
to a gain to $1,346, according to Reuters technical analyst Wang
Tao. Among other precious metals, silver XAG= rose 0.6% to
$14.82 per ounce and platinum XPT= gained 0.6% to $813.30.
Palladium XPD= was up 0.4% at $1,411.90 an ounce after
hitting a more than one-month high of $1,415.96 earlier in the
session.