CORRECTED-PRECIOUS-Gold prices ease off one-week peak as dollar rebounds

(Corrects Shinzo Abe's title to prime minister from president
In the seventh paragraph.)
* Political uncertainty in Europe drives dollar's gains vs
euro
* Gold's path mixed after failure to break $1,286
level-technicals
* Palladium hits more than one-week high

By Brijesh Patel
May 28 (Reuters) - Gold edged away from the previous
session's one-week peak on Tuesday as the dollar regained
momentum as the preferred safe-haven from uncertainty over
U.S.-China trade tensions, while weakness in equity markets
limited losses for the metal.
Spot gold XAU= was down 0.2% at $1,282.73 per ounce by
1200 GMT, having touched its highest since May 17 at $1,287.32
in the previous session.
U.S. gold futures GCv1 were 0.1% lower at $1,282.80 an
ounce.
"The gold market is clearly lacking direction at the moment.
There is uncertainty in financial markets, which is positive for
gold. At the same time, the gold market continues to face
headwinds from a stronger U.S. dollar," Julius Baer analyst
Carsten Menke said.
"Despite these trade tensions, gold is not attracting any
safe-haven flows at the moment."
The dollar .DXY rose 0.2% against a basket of leading
currencies after touching its lowest since May 16 at 97.546 on
Friday, emerging as the preferred hedge from the trade tensions,
repeating a trend seen last year.
U.S. President Donald Trump said on Monday at a news
conference with Japanese Prime Minister Shinzo Abe that he was
"not ready to make a deal with China", denting hopes of a trade
agreement between the world's biggest economies. The dollar has also benefited from a slide in the euro,
driven lower by political risks in Europe following last week's
European Union parliamentary elections, which showed a
polarisation of the 28-member bloc. USD/ Limiting gold's declines, however, were concerns about the
budget deficit in Italy, which weighed on European shares, with
broad uncertainties over trade and economic growth denting
investor enthusiasm towards riskier assets. MKTS/GLOB
Also supporting bullion were increasing bets on an interest
rate cut by the U.S. Federal Reserve, following a couple of weak
economic readings from the United States late last week. Lower interest rates tend to be supportive for gold, as it
reduces the opportunity cost of holding the non-yielding asset.
Signals are mixed for spot gold as it failed twice to break
resistance at $1,286 per ounce, according to Reuters technical
analyst Wang Tao. a technical point of view, we would have a first
positive signal above $1,290, with space in this case for
further rallies to $1,300, while the first support levels are
placed at $1,270 and $1,266," said ActivTrades analyst Carlo
Alberto De Casa in a note.
Among other precious metals, silver XAG= slipped 0.7% to
$14.48 per ounce, while platinum XPT= edged 0.5% up to
$809.73.
Palladium XPD= climbed 0.7% to $1,345.90 per ounce, after
hitting its highest since May 15 at $1,349.

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