June 14(Reuters) - Gold prices rose to their highest in a
week on Friday, supported as weak U.S. economic data stoked
expectations the Federal Reserve would cut interest rates.
Investors were also keeping a close eye on tensions in the
Middle East after attacks on tankers there stoked U.S.-Iran
tensions and raised concerns over supply flows through one of
the world's main sea lanes. Demand for gold often increases during times of political or
economic uncertainty as it is widely viewed as a safe-haven
asset.
FUNDAMENTALS
* Spot gold XAU= was up 0.1% at $1,342.69 as of 0104 GMT,
after hitting its highest since June 7 at $1,344.94.
* U.S. gold futures GCv1 rose 0.3% to $1,347.20 an ounce.
* The number of Americans filing applications for
unemployment benefits unexpectedly rose last week, adding to
concerns about U.S. labour market after job growth slowed
sharply in May. * Other data showed U.S. import prices fell by the most in
five months in May in the latest indication of muted inflation
pressures, adding to expectations the Fed will cut rates this
year.
* Increased expectations of rate cuts pulled short-dated
U.S. Treasury yields lower on Thursday, steepening the yield
curve ahead of Friday's retail sales data and the Fed's meeting
next week. * The United States blamed Iran for the attacks on two oil
tankers in the Gulf of Oman on Thursday that drove up oil prices
LCOc1 and raised concerns about a new U.S.-Iranian
confrontation, but Tehran bluntly denied the allegation.
* President Donald Trump's top economic adviser said the
economic burden of a trade war between the world's two largest
economies will shift to China, rather than the United States.
* Meanwhile, China's commerce ministry said Beijing will not
yield to any "maximum pressure" from Washington, and any attempt
by the United States to force China into accepting a trade deal
will fail. * The dollar index .DXY , which tracks the greenback
against six major currencies, was steady on Friday. USD/
* Asian stocks held their ground on Friday after Wall Street
gained. MKTS/GLOB
DATA AHEAD (GMT)
* 1030 Russia Central Bank Key Rate June