May 31 (Reuters) - Gold prices rose on Friday to remain on
track for their first monthly gain since January, with
expectations of cuts in U.S. interest rates boosted by inflation
data for the first quarter.
Markets were also keeping a close eye on international trade
tensions, with U.S. President Donald Trump's shock move to slap
tariffs on Mexico risking tipping the United States, and maybe
the whole world, into recession. * Spot gold XAU= was up 0.3% at $1,292.68 per ounce at
0141 GMT. It has risen about 0.7% so far this month.
* The metal is also on track for a second consecutive weekly
gain, up about 0.5% over the week.
* U.S. gold futures GCv1 rose 0.4% to $1,297 an ounce.
* U.S. inflation was much weaker than initially thought in
the first quarter amid a sharp slowdown in domestic demand,
which could cast doubts on the Federal Reserve's view that the
benign price pressures were largely because of temporary
factors. * Asian shares sank and sovereign bonds surged on Friday
after Trump's Thursday comments that the United States will
impose a 5% tariff on all goods coming from Mexico starting on
June 10 until illegal immigration across the southern border is
stopped. MKTS/GLOB * Also adding to economic woes, China's factory activity
shrank more than expected in May, an official survey showed on
Friday, heaping pressure on Beijing to roll out more stimulus to
support an economy hit by a bruising trade war with the United
States. * Gold is widely viewed as a safe-haven asset, meaning its
appeal typically grows amid political and economic tensions.
* The U.S. dollar .DXY was heading for a 0.5% gain this
week, supported by weakness in peers such as the euro and
sterling. FRX/
DATA AHEAD (GMT)
* 0600 UK Nationwide House Price MM YY May
* 1200 Germany CPI Prelim YY May
* 1200 Germany HICP Prelim YY May
* 1200 India GDP Quarterly YY Q4
* 1230 U.S. Consumption, Adjusted April