Gold rises on renewed U.S.-China trade tensions

By Zandi Shabalala

LONDON (Reuters) - Gold snapped a three-session losing streak on Monday as the dollar fell and China raised tariffs on U.S. products, escalating global trade tensions.

China imposed extra tariffs of up to 25 percent on 128 U.S. products including frozen pork and wine in response to U.S. duties on imports of aluminium and steel.

With many major financial centres closed for Easter Monday, spot gold added 0.8 percent to $1,332.20 per ounce by 1346 GMT. It recorded its third straight quarter of gains on Friday.

U.S. gold futures rose 0.6 percent to $1,334.90 an ounce.

"Protectionism, geopolitical tensions, equities volatility and an expected spike in inflation are deemed to be the main factors pushing ...gold," said Forextime chief market strategist Hussein Sayed.

Gold is often used as a store of value during times of financial or political uncertainty.

"With investors' trepidation likely to continue overwhelming markets, gold should remain in favour," said Stephen Innes, head of trading at OANDA, adding that gold traders would continue to take their cues from broader dollar sentiment.

A weaker dollar generally boosts the price of gold. The dollar index, which measures it against six other major currencies, eased 0.2 percent.

Gold fell 1.7 percent last week in its biggest such drop since early December. But it climbed 1.7 percent in January-March, posting its third straight quarterly gain.

"Look for gold to break above the $1,337 level for further momentum. Support appears around the $1,325 area. It is difficult not to be bullish in the current panorama," said Kitco Metals's Global Trading Director, Peter Hug.

Hedge funds and money managers increased their net long positions in COMEX gold contracts in the week to March 27, U.S. Commodity Futures Trading Commission data showed on Friday.

Gold speculators raised their net long position by 50,996 contracts to 172,834 contracts, CFTC data showed.

In other precious metals, spot silver climbed 0.8 percent to $16.45 per ounce.

Platinum rose 0.5 percent to $932.50 per ounce, having fallen to its lowest since Dec. 29 in the previous session.

Palladium was down 0.3 percent at $948.50 an ounce after dropping to $938.22 on Thursday, its lowest since Oct. 11.

"The global platinum market showed a substantial supply surplus in 2017 and is also likely to remain oversupplied in 2018," said Commerzbank, adding there was therefore little potential for platinum to recover.

(Reporting by Swati Verma in Bengaluru; Editing by Manolo Serapio Jr. and John Stonestreet)