PRECIOUS-Gold prices climb on softer dollar, Trump's fresh tariff threat

June 2 (Reuters) - Gold prices climbed on Monday as U.S. President Donald Trump threatened to double tariffs on imported steel and aluminum, while a weaker dollar also supported greenback-priced bullion.

FUNDAMENTALS

* Spot gold XAU= was up 0.6% at $3,309.89 an ounce, as of 0056 GMT. U.S. gold futures GCcv1 also climbed 0.6% to $3,333.30.

* The U.S. dollar index .DXY edged 0.1% lower, making bullion less expensive for overseas buyers.

* Trump said on Friday that he plans to raise tariffs on imported steel and aluminum to 50% from 25%, prompting the European Commission to warn that Europe is prepared to retaliate.

* Geopolitical tensions escalated as Ukraine and Russia sharply ramped up the war with one of the biggest drone battles of their conflict, a Russian highway bridge blown up over a passenger train and an ambitious attack on nuclear-capable bombers deep in Siberia.

* Gold is considered as a safe-haven asset during geopolitical and economic uncertainty.

* Meanwhile, Trump and Chinese President Xi Jinping are expected to speak soon to iron out trade issues including a dispute over critical minerals, according to Treasury Secretary Scott Bessent on Sunday.

* On Friday, the U.S. Personal Consumption Expenditures Price index saw a year-on-year increase of 2.1% in April, versus a 2.2% forecast.

* Fed Governor Christopher Waller said that interest rate cuts remain possible later this year even as the Trump administration's tariff regime is likely to push up price pressures temporarily.

* Elsewhere, spot silver XAG= rose 0.2% to $33.04 an ounce, platinum XPT= was down 0.2% at $1,054.28 and palladium XPD= was steady at $970.79.