GLOBAL MARKETS-Gold soars to six-year high, stocks slide after Powell speech

(Adds close of U.S. markets)
* Dollar rebounds, gold retreats as Powell casts doubt on
rate cut
* Stocks slip on disappointing U.S. economic data
* Brent rises ahead of U.S. data

By Herbert Lash
NEW YORK, June 25 (Reuters) - Gold soared to an almost
six-year high on Tuesday on escalating U.S.-Iran tensions, while
equity markets slid on disappointing economic data and
uncertainty on whether the Federal Reserve will cut interest
rates in July as has been expected.
Fed Chairman Jerome Powell said in a speech the U.S. central
bank is insulated from short-term political pressures as
policymakers wrestle with whether to cut rates amid slowing
growth as President Donald Trump has demanded. Equity markets have rallied this month in anticipation that
Fed policymakers would cut rates, but Powell's remarks cast
doubt on those expectations when he referred to the Fed's
independence.
"Clearly, he's referring to comments from the White House,"
said Quincy Krosby, chief market strategist at Prudential
Financial in Newark, New Jersey. "The market wants to hear the
Fed remains steadfast - what it perceives is the correct path to
follow in terms of monetary policy, rather than acquiescing to
the administration."
The dollar rebounded and gold prices retreated after
Powell's comments trimmed market expectations that the U.S.
central bank will cut rates by half a percentage point next
month.
Gold had gained 10% in price so far in June, climbing above
$1,400 an ounce for the first time since August 2013 after
briefly touching the psychological barrier on Monday.
The dollar had fallen to a three-month low against the euro
and dropped to its weakest against the Japanese yen since early
January as the prospect of a Fed rate cut eroded demand. The yen
also benefited from concerns about U.S.-Iranian tensions.
Tehran said new U.S. sanctions permanently closed the path
to diplomacy between the two countries. The dollar index .DXY rose 0.19%, while the euro EUR=
reversed course to fall 0.25% to $1.1369. The yen strengthened
0.1% versus the greenback at 107.17 per dollar.
Disappointing economic data weighed on stocks.
U.S. consumer confidence tumbled to a 21-month low in June
as households grew a bit more pessimistic about business and
labor market conditions amid concerns of an escalation in the
trade tensions between the United States and China. The U.S. economy's prospects were further dimmed by other
data showing sales of new single-family homes unexpectedly fell
for a second straight month in May.
MSCI's gauge of global equity markets, most major European
indexes and stocks on Wall Street slipped.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.73%, while the pan-European STOXX 600 index .STOXX closed
down 0.1%.
The Dow Jones Industrial Average .DJI fell 179.32 points,
or 0.67%, to 26,548.22. The S&P 500 .SPX lost 27.97 points, or
0.95%, to 2,917.38 and the Nasdaq Composite .IXIC dropped
120.98 points, or 1.51%, to 7,884.72.
U.S. benchmark Treasury yields fluctuated around the key 2%
level as investors weighed the outlook for the U.S.-China trade
spat against the prospect that the Fed may be less dovish than
traders expect.
The benchmark 10-year Treasury note US10YT=RR rose 8/32 in
price to push yields down to 1.9918%.
Trump threatened to obliterate parts of Iran if it attacked
"anything American," in a new war of words. Tehran condemned the
latest U.S. sanctions on Iran and called White House actions
"mentally retarded."
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, for discussions on
trade, 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 rose slightly ahead of U.S. data expected to show
crude stocks declining there, outweighing investors' concerns
that U.S.-China trade tensions could weigh on fuel demand.
Benchmark Brent crude futures LCOc1 rose 19 cents to
settle at $65.05 per barrel.
U.S. crude futures CLc1 slid 7 cents to settle at $57.83 a
barrel.
U.S. gold futures GCcv1 were little changed on settlement
at $1,418.7 an ounce.