PRECIOUS-Gold edges up to 1-week high as U.S.-China trade worries persist

* Money managers cut net longs in gold in week to May 21 -
CFTC
* Gold may retest resistance at $1,290 - analyst

(Updates prices)
By Brijesh Patel
May 27 (Reuters) - Gold hit a more than one-week peak on
Monday as trade tensions between the United States and China
lifted appetite for assets seen as a haven from risk, while weak
U.S. economic data boosted hopes for a rate cut from the Federal
Reserve.
Spot gold XAU= inched up 0.1% to $1,285.56 per ounce by
1147 GMT. The metal touched $1,287.32 earlier in the session,
its highest since May 17.
U.S. gold futures GCcv1 were 0.1% higher at $1,285.30 an
ounce.
U.S. President Donald Trump said on Monday he was "not yet
ready" to make a deal with China, hinting that the world's
biggest economies are far from a trade agreement. "Some of the comments made by Trump over the trade talks
with China were not overly optimistic," ING analyst Warren
Patterson said.
"The continued uncertainty around trade is helping to
support prices... that uncertainty is increasing demand for
safe-haven assets."
China on Friday denounced U.S. Secretary of State Mike
Pompeo for fabricating rumours after he said the chief executive
of China's Huawei Technologies Co Ltd HWT.UL was lying about
his company's ties to the Beijing government. Weak manufacturing activity data coupled with a dip in new
orders for U.S.-made capital goods last week ignited worries
that the trade conflict may hurt the world's largest economy,
lifting investor expectations for a U.S. rate cut. Over the weekend, Trump reiterated a complaint that the
Fed's policies had kept U.S. economic growth from reaching its
full potential. Investors also eyed European Parliament elections, where a
two-party "grand coalition" of the conservative European
People's Party (EPP) and the Socialists (S&D) lost their
combined majority after a surge in support for liberals, the
Greens and eurosceptic nationalists.
"The rise of volatility triggered by geopolitics benefited
the yellow metal," Alfonso Esparza, senior market analyst at
OANDA, said in a note.
"If the UK political game of thrones and U.S.-China trade
keep uncertainty levels high, gold could once again jump above
$1,300."
Gold may retest resistance at $1,290 an ounce, a break above
which could lead to a gain to the next resistance at $1,295,
Reuters technical analyst Wang Tao said. TECH/C
Meanwhile, hedge funds and money managers sharply reduced
their net long positions in COMEX gold in the week to May 21,
the U.S. Commodity Futures Trading Commission (CFTC) said on
Friday. CFTC/
Among other precious metals, silver XAG= was up 0.2% at
$14.59 per ounce.
Platinum XPT= rose 0.4% to $805.47 an ounce and palladium
XPD= fell 0.6% to $1,327.26.