GLOBAL MARKETS-Gold soars to 6-year high as trade, as Iran tensions mount

(Adds U.S. market open, byline, dateline; previous LONDON)
* Wagers on more dovish Fed talk keep yields, dollar down
* Gold extends gains as rates and dollar drop

By Herbert Lash
NEW YORK, June 25 (Reuters) - Gold soared to almost a
six-year high on Tuesday on escalating U.S.-Iran tensions and
U.S.-Sino trade anxiety, leading traders to pile into safe-haven
government debt and to snap up the yen and Swiss franc at the
expense of the dollar.
Gold has gained 10% in price so far this month, climbing
above $1,400 an ounce for first time since August 2013 after
briefly touching the psychological barrier on Monday.
The dollar, meanwhile, fell to a three-month low against the
euro and dropped to its weakest against the Japanese yen since
early January as the prospect of an interest rate cut by the
Federal Reserve knocked demand for the U.S. currency.
The yen also benefited from concerns about tensions between
the United States and Iran, which said U.S. sanctions
permanently closed the path to diplomacy between the two
countries. MSCI's gauge of global equity markets, most major European
indexes and stocks on Wall Street slipped, with bank shares
dipping ahead of speeches by at least five Fed policymakers
later in the day, including Chair Jerome Powell.
Factors behind gold's strength include slower global growth,
"the tinder box of the Middle East with Iran and the G20, which
may not bring the (trade) deal with China that everybody is
expecting," said George Gero, a managing director at RBC Wealth
Management in New York.
Spot gold XAU= added 0.8% to $1,430.44 an ounce.
The dollar JPY= slid 0.34% to 106.94 yen after slipping to
106.78 yen during Asian trading, its weakest since Jan. 3.
Rate-sensitive bank stocks .SPXBK fell 0.87%, as yields on
U.S. benchmark debt, the 10-year Treasury note, fell below the
closely watched 2% level.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.36%, while the pan-European STOXX 600 index .STOXX lost
0.09%.
The Dow Jones Industrial Average .DJI fell 80.95 points,
or 0.3%, to 26,646.59. The S&P 500 .SPX lost 13.39 points, or
0.45%, to 2,931.96 and the Nasdaq Composite .IXIC dropped
63.23 points, or 0.79%, to 7,942.46.
Powell is expected to maintain a dovish posture after the
U.S. central bank last week signaled it could cut rates as early
as July to battle slowing growth at home and abroad.
"Powell is probably the main event today. If he repeats what
he said last week I don't think markets really move all that
much," said Gennadiy Goldberg, an interest rate strategist at TD
Securities in New York.
Interest rate futures traders are pricing in a 62% chance of
a 25 basis point cut in July and a 38% chance of a 50 basis
point cut, according to the CME Group's FedWatch Tool.
U.S. President Donald Trump is due to meet one-on-one with
at least eight world leaders at the G20 summit in Osaka, Japan
at the end of the week, including Chinese President Xi Jinping
and Russian President Vladimir Putin.
Chinese investors seemed none too hopeful as Shanghai blue
chips .CSI300 slipped 1%. Japan's Nikkei .N225 dropped 0.4%.
Oil prices ticked up in anticipation of data due later that
would show U.S. crude stocks fell, erasing earlier declines
linked to concerns over waning demand
Benchmark Brent crude futures LCOc1 rose 27 cents to
$65.13.
U.S. crude futures CLc1 rose 8 cents to $57.98 a barrel.