Gold recovers from seven-month low as dollar eases

By Zandi Shabalala

LONDON (Reuters) - Gold prices recovered from a near seven-month low on Tuesday as the dollar eased but platinum touched fresh 10-year lows on concerns that trade sanctions could hit demand for the metal.

Spot gold was up 0.8 percent at $1,251.43 an ounce at 1402 GMT. Earlier in the session, bullion prices dropped to $1,237.32, their lowest since Dec. 12, 2017.

U.S. gold futures rose 0.9 percent to $1,252.80 an ounce.

"The trend of the dollar is bearish for gold but as we start the new quarter we are seeing some dollar profit-taking and that is boosting gold," Forex.com analyst Fawad Razaqzada said.

He said investors had booked profits ahead of the minutes from a recent U.S. Federal Reserve meeting and U.S. non-farm payrolls data due this week.

Markets follow the two releases closely as they can give clues on the direction of monetary policy decisions in the United States, which impact non-interest yielding gold.

The dollar index, which measures the greenback against a basket of six major currencies, was 0.4 percent lower.

A softer greenback generally decreases the cost of dollar-denominated bullion for investors paying in other currencies.

The United States is set to place tariffs on $34 billion of Chinese goods on July 6, but global stocks remained resilient, spurred by tech-driven rises in the United States.

The U.S. Chamber of Commerce on Monday denounced U.S. President Donald Trump's handling of global trade disputes, issuing a report that argued tariffs imposed by Washington and retaliation by its partners would boomerang badly on the American economy.

Gold can gain in times of uncertainty as it is seen as a safe place to park assets.

Analysts warned that the increase in gold on Tuesday did not mark the end of its recent downward trend.

"It appears quite clear that the trend is still bearish for gold and that a first positive impulse could only arrive if prices soar to $1,255," ActivTrades analyst Carlo Alberto De Casa said.

Silver climbed 1 percent to $16 an ounce, while palladium rose 0.4 percent to $948.22 per ounce.

Platinum gained 3 percent to $839 an ounce. Earlier in the session, it fell to the lowest since December 2008 at $793.

Autocatalyst metal platinum tumbled as an intensifying U.S.-European Union trade spat pressured precious metals, and political risk in Germany weighed.

"Supply and demand fundamentals do not look particularly attractive for platinum - we expect surpluses to persist throughout our forecast period," UBS said in a note, downgrading its platinum outlook for the year.

(Reporting by Karen Rodrigues and Apeksha Nair in Bengaluru; Editing by Dale Hudson/David Evans)