Aug 2 (Reuters) - Gold prices fell on Friday, consolidating
from a more than 2% surge in the previous session after U.S.
President Donald Trump broke a trade truce with China, but the
metal was headed for a third weekly gain in four.
FUNDAMENTALS
* Spot gold XAU= was down 0.9% at $1,432.15 per ounce as
of 0139 GMT, after hitting a two-week high of $1,446.10 earlier
in the session.
* The metal has risen about 1% so far this week.
* U.S. gold futures GCcv1 rose 1% to $1,445.90 an ounce.
* Trump said he would impose an additional 10% tariff on
$300 billion worth of Chinese imports on Sept. 1 after U.S.
negotiators returned from trade talks in Shanghai, saying China
had failed to buy large quantities of U.S. agricultural products
as promised. * Trump also said if trade negotiations fail to progress he
could raise tariffs further - even beyond the 25% levy he has
already imposed on $250 billion of imports from China.
* The tariffs may also force the Federal Reserve to again
cut interest rates to protect the U.S. economy from trade-policy
risks, experts said. * The October Fed funds rate futures FFV9 have jumped to
now fully price in a rate cut in September, compared with only
around 60% before the tariff announcement. Another 25 basis
point move is priced in by December.
* Trump's surprise announcement sent shockwaves through
global financial markets and wiped out the dollar's recent rally
against the yen, made after U.S. Federal Reserve Chairman Jerome
Powell indicated the central bank was not entering a prolonged
easing cycle. MKTS/GLOB
* The dollar index .DXY was steady on Friday after posting
its biggest daily decline in two weeks in the previous session.
* SPDR Gold Trust GLD , the world's largest gold-backed
exchange-traded fund, said its holdings rose 0.53% to 827.82
tonnes on Thursday from 823.42 tonnes on Wednesday. GOL/ETF
* Global gold demand rose 8% in the first half of this year
to the highest since 2016, driven by central bank buying and a
flood of investment into gold-backed exchange traded funds
(ETFs), the World Gold Council said on Thursday. AHEAD(GMT)
* 1230 US Non-Farm Payrolls July
* 1230 US Unemployment Rate July
* 1230 US International Trade June
* 1400 US Factory Orders MM June