PRECIOUS-Gold off 1-month peak as trade optimism buoys dollar, equities

* SPDR gold holdings have best one-day gain in nearly 2
months
* Investors eyeing U.S.-Iran developments -analyst
* No collapse in China trade talks -Trump

(Adds quote, updates prices)
By Eileen Soreng
May 14 (Reuters) - Gold retreated from a one-month high hit
earlier on Tuesday as stock markets and the dollar took heart
after the United States and China agreed to keep negotiations
going to end their prolonged trade war.
Spot gold XAU= was 0.3% lower at $1,295.18 per ounce as of
1:49 p.m. ET (1749 GMT), after hitting $1,303.26 earlier in the
session, its highest since April 11.
U.S. gold futures GCcv1 settled down 0.4% at 1,296.3.
"We are seeing a little readjustment because the dollar
index is back up a little and stocks are rebounding and
(gold)traders are taking a little money off the table for now,"
said George Gero, managing director at RBC Wealth Management.
The dollar index .DXY was up about 0.2% after falling to
near a one-month low in the previous session. U.S. stocks
climbed following optimistic comments from Washington and
Beijing. USD/ .N
U.S. President Donald Trump said on Tuesday that trade talks
with China have not collapsed and called the widening U.S.-China
tariff war "a little squabble," even as his administration
readies 25% duties on all remaining Chinese imports.
"The impact of the U.S.-China trade war has conflicting
implications for gold," Fawad Razaqzada, market analyst with
Forex.com, wrote in a note.
Gold investors will have to consider the impact on physical
demand from China in the event of a no deal, while higher
tariffs on Chinese exports will also hurt the U.S. consumer,
further weighing on demand, Razaqzada added.
Gold climbed 1.1% on Monday, marking its biggest one-day
percentage rise since Feb. 19, after China announced it would
impose higher tariffs on a range of U.S. goods, which followed
Washington's decision last week to hike levies on $200 billion
in Chinese imports. Investors were also keeping tabs on escalating tensions
between the United States and Iran after Saudi Arabia said two
of its oil tankers were among those attacked off the coast of
the United Arab Emirates. Headlines such as escalating Iran tensions are keeping gold
from selling off, Gero said.
A rise in investor interest in bullion was also evident
after holdings of SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, rose 0.44% on Monday, its
biggest one-day rise in nearly two months.
"Gold is turning bullish on the daily charts as prices have
broken above the previous higher low at $1,290," Lukman Otunuga,
research analyst at FXTM, said in a note, adding, "a solid
breakout and daily close above $1,300 is likely to encourage a
move higher towards $1,310 and $1,324, respectively."
Among other precious metals, silver XAG= was up 0.1% at
$14.78 per ounce.
Platinum XPT= rose 0.4% to $856.66 an ounce, while
palladium XPD= gained 1.4% to $1,340.52.