Aug 16 (Reuters) - Gold prices gained on Friday as the steep
fall in U.S. bond yields continued, while conflicting signals on
the Sino-U.S. trade war added to economic uncertainty.
FUNDAMENTALS
* Spot gold XAU= was up 0.2% at $1,525.21 per ounce at
0105 GMT.
* The metal has gained nearly 2% so far this week, and is on
track for its third straight weekly gain.
* U.S. gold futures GCcv1 rose 0.3% to $1,535.50 an ounce.
* Data showing strong U.S. retail sales in July did not have
an impact on the bond rally. Yields on 30-year paper US30YT=RR
hit an all-time low and are set to fall 27 basis points for the
week, the sharpest such decline since mid-2012. US/
* China on Thursday vowed to counter the latest $300 billion
U.S. tariffs, but also called on the U.S. to meet it halfway on
a potential trade deal. * On Thursday, U.S. President Donald Trump said he believed
China wanted to make a trade deal, and that the trade conflict
would be fairly short. * Investors are focused on the Federal Reserve's annual
symposium next week. Traders see an about one-in-three chance of
a 50 basis-point rate cut by the Fed this September. FEDWATCH
* The European Central Bank's (ECB) Olli Rehn on Thursday
flagged the need for a significant easing package in September.
The ECB is widely expected to cut interest rates by at least 10
basis points when it meets next month. * Mexico's central bank cut its key lending rate for the
first time since June 2014 on Thursday. * Against a basket of six major currencies, the dollar index
.DXY edged higher. Since hitting a three-week low on Aug. 9,
the dollar index has recovered, rising 1.1%. USD/
DATA AHEAD (GMT)
* 1230 US Housing Starts Number July
* 1400 US U Mich Sentiment Prelim August