PRECIOUS-Gold scales over 3-month peak on hopes of Fed rate cut, softer dollar

* Dollar slips to seven-week low
* Powell: Fed will react "as appropriate" to trade war risks
* Silver hits near one-month high
* Platinum tops more than two-week high

(Updates prices)
By Brijesh Patel
June 5 (Reuters) - Gold prices rose to a more than
three-month high on Wednesday, after latest comments from U.S.
Fed officials lifted expectations of a cut in interest rate,
pushing the dollar to a multi-week low.
Spot gold XAU= jumped 0.7% to $1,333.90 per ounce as of
0730 GMT, after clocking its highest level since Feb. 21 at
$1,335.41 earlier in the session.
U.S. gold futures GCv1 climbed 0.8% to $1,339.60 an ounce.
"After the announcement from Trump on tariffs on Mexico,
there doesn't seem to be an end (to trade woes). Markets are
starting to come to grip with how these (trade conflicts) are
going to slow down the global economy and not just the U.S.
economy," said David Song, analyst with DailyFx.
Fed Chair Jerome Powell said on Tuesday the central bank
would act "as appropriate" in the face of trade war risks,
leaving the door open for a possible rate cut. Early in the week, St. Louis Fed President James Bullard
said that a rate cut "may be warranted soon". "The focus will be on whether we will see global community
of central bankers step in again and keep up the equity rally
going ... But until then this flight to safety (assets) will
continue," Song added.
Economic data released shortly after Powell's statement on
Tuesday also stoked expectations for a rate cut, as new orders
for U.S.-made goods fell in April and shipments dropped by the
most in two years. Lower interest rates would support bullion as they reduce
the opportunity cost of holding the non-yielding metal.
Supporting bullion's appeal, the dollar index .DXY dropped
to a near seven week-low on possibility of an interest rate cut
in the face of economic risks. USD/
Gold prices have gained more than $50 since Trump's tariff
threat on Mexico, with investors selling riskier assets and
seeking refuge in safe-haven bullion.
The jump in gold prices also saw a 2.2% rise in the holdings
of SPDR Gold Trust GLD , the world's largest gold-backed
exchange-traded fund on Monday. It was SPDR's biggest one-day
percentage gain since July 2016. GOL/ETF
"We would lean to the long side in gold for the moment, as
there simply are too many balls in the air that may not stay up
for long and could send gold even higher from here if they
tumble," INTL FCStone analyst Edward Meir said in a note.
Among other precious metals, silver XAG= gained 0.2% to
$14.84 per ounce after touching a near one-month high of $14.88.
Platinum XPT= rose 1.4% to $826.62 per ounce, after
hitting its highest level since May 20 at $827.14.
Palladium XPD= edged 0.1% higher to $1,347.45 per ounce.