PRECIOUS-Gold draws support from U.S.-China trade worries after sharp sell-off

* Trump threatens more tariffs on China imports
* "Remain cautiously constructive on gold" -INTL FCStone
analyst

(Updates prices)
By Brijesh Patel
June 11 (Reuters) - Gold held steady on Tuesday after
posting its biggest one-day percentage fall in two months in the
previous session, as Washington's fresh trade threats against
China dented investor optimism spurred by a U.S.-Mexico deal.
Spot gold XAU= was up 0.1% at $1,328.83 per ounce as of
0551 GMT, while U.S. gold futures GCv1 rose 0.3% to $1,332.90
an ounce.
Bullion lost more than 1% in the previous session to an
intra-day low of $1,324.50 after markets took heart from a deal
between the United States and Mexico to avert yet another tariff
war late last week.
"Easing (U.S.-Mexico) trade tensions weighed on the gold
market yesterday, but it hasn't erased concerns around the
U.S.-China talks", ANZ analyst Daniel Hynes said.
The (U.S.-China concerns) "resulted in yesterday's sell-off
being short-lived and we are seeing some residual safe-haven
buying keeping prices well supported," he said.
U.S. President Donald Trump said he was ready to impose
another round of punitive tariffs on Chinese imports if he
cannot make progress in trade talks with China's President at a
Group of 20 summit later this month.
Trump has repeatedly said he expected to meet Xi at the June
28-29 summit in Osaka, Japan, although China has yet to
officially confirm any such meeting.
China's foreign ministry said on Monday that China is open
to more trade talks with Washington but has nothing to announce
about a possible meeting.
U.S. President also warned that if a portion of the
U.S.-Mexico deal, which requires ratification by Mexican
lawmakers, was not approved, "tariffs will be reinstated".

The dollar .DXY was largely steady against other major
currencies on Tuesday, but investor appetite for risk was kept
in check after Trump renewed his tariff threats towards China.
FRX/ MKTS/GLOB
The U.S currency, however, has lost more than 1.5% since
scaling over a two-year peak of 98.371 on May 23 on expectations
of an interest rate cut by U.S. Federal Reserve.
"We remain cautiously constructive on gold despite Monday's
decline as we have to suspect that the trend of a lower dollar
and depressed global interest rates will continue to stay in
place for some time, providing gold prices with some ballast,"
INTL FCStone analyst Edward Meir said in a note.
Among other precious metals, silver XAG= gained 0.4% to
$14.72 per ounce, and platinum XPT= rose 0.6% to $806.78 an
ounce.
Palladium XPD= eased 0.3% to $1,378.50 per ounce after
hitting a more than one-month high of $1,393.53 in the previous
session.