PRECIOUS-Gold hovers near 3-week low as trade war fears ebb, dollar firms

By Anmol Choubey

July 29 (Reuters) - Gold prices were little changed on Tuesday, hovering near a three-week low, as easing fears of a global tariff war and a stronger dollar dampened its safe-haven appeal.

Spot gold XAU= held its ground at $3,318.71 per ounce, as of 0601 GMT. The precious metal hit its lowest since July 9 in the previous session.

U.S. gold futures GCcv1 were up 0.2% at $3,317.50.

"Gold trading at circa $3,300 or below is still getting the attention of buyers. While short-term market dynamics courtesy of trade deals and a stronger USD aren't helping gold, looking further ahead there is still upside potential," KCM Trade Chief Market Analyst Tim Waterer said.

Top U.S. and Chinese economic officials met in Stockholm on Monday for more than five hours of talks aimed at resolving longstanding economic disputes at the centre of a trade war between the world's top two economies, seeking to extend a truce by three months.

The U.S. struck a framework trade agreement with the European Union on Sunday, imposing a 15% import tariff on most EU goods - half the threatened rate - and averting a bigger trade war between the two allies that account for almost a third of global trade.

The dollar index .DXY held near a two-week high, making gold costlier for buyers holding other currencies. USD/

Investors are awaiting a set of U.S. macroeconomic data this week, including inflation figures and the employment report, alongside the Federal Reserve's two-day policy meeting beginning later in the day, with expectations that rates will be held steady.

If U.S. data is weak or if U.S. President Donald Trump's criticisms of the Fed inspire the central bank to adopt a more dovish tone this week, that could be positive for gold, Waterer said.

Spot silver XAG= was steady at $38.18 per ounce, while platinum XPT= edged down 0.1% to $1,388.98 and palladium XPD= slipped 1.7% to $1,225.44.

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