PRECIOUS-Gold little changed as traders seek clarity on trade war direction

* Gold may peak at $1,546-$1,568/oz range -techs
* Markets fully priced in for a 25 bp cut in Sept by U.S.
Fed

(Adds chart, updates prices)
By Harshith Aranya
Aug 27 (Reuters) - Gold prices were largely steady on
Tuesday, retreating from an over six-year peak hit in the
previous session, as U.S. President Donald Trump signalled a
possible reconciliation with China, calming worries about an
escalation in their trade war.
Spot gold XAU= was up 0.2% to $1,528.90 per ounce, as of
0542 GMT.
Gold prices on Monday surged to their highest in more than
six years, surpassing the $1,550 mark in early trade, before
paring gains after Washington and Beijing indicated a possible
thaw in their trade spat.
The non-yielding bullion is often seen as a safer investment
during times of political and financial uncertainty.
U.S. gold futures GCcv1 were flat at $1,537.80 an ounce.
"Prices are steady because of the conciliatory tone both
China and Trump sounded yesterday; the market started to hope
that there is some deal coming out of the trade dispute," said
Helen Lau, analyst, Argonaut Securities.
Lau added that hopes for monetary policy easing by central
banks across the globe, to curtail economic slowdown, provided
some support for the bullion.
On Monday, U.S. President Donald Trump on Monday flagged the
possibility of a trade deal with China, and said he believed
Beijing was sincere in its desire to reach an agreement.
Chinese Vice Premier Liu He, who has been leading the talks
with Washington, said on Monday that China opposed any
escalation in trade tensions. Global markets had been roiled at the start of the week by
new tariffs from the world's two largest economies.
However, underscoring the possibility of further sudden
U-turns and keeping gold from diving further, just on Sunday the
White House had said Trump regretted not raising the tariffs on
China even more. "More cynical heads are clearly ruling the gold market at
the moment, and are refusing to listen to the short-term noise
from the White House," OANDA analyst Jeffrey Halley wrote in a
note.
On the technical side, spot gold may peak in a range of
$1,546-$1,568 per ounce, as suggested by its wave pattern and a
projection analysis, according to Reuters technical analyst Wang
Tao. On the back of widespread risk-on sentiment, the benchmark
10-year U.S. Treasury yield US10YT=RR pulled back from a
three-year low, which it reached on Monday. US/
Higher bond yields increase the opportunity cost of holding
bullion, and also supports the dollar.
The dollar index .DXY , which measures the greenback's
value against a basket of six major currencies, rose about 0.5%
overnight. USD/
The markets are also fully priced for a quarter-point cut by
the U.S. Federal Reserve in rates next month, and over 100 basis
points of easing by the end of next year. FEDWATCH
Elsewhere, silver XAG= rose 0.5% to $17.71 an ounce, while
platinum XPT= increased 0.2% to $856.30.
Palladium XPD= also rose 0.2% to $1,476.59 per ounce.

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