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PRECIOUS-Gold prices rise on falling bond yields, trade uncertainty


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Aug 16 (Reuters) - Gold prices gained on Friday as the steepfall in U.S. bond yields continued, while conflicting signals onthe Sino-U.S. trade war added to economic uncertainty.

FUNDAMENTALS

* The metal has gained nearly 2% so far this week, and is ontrack 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 havean 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 theweek, the sharpest such decline since mid-2012. urn:newsml:reuters.com:*:nL2N25A16DUS/

* China on Thursday vowed to counter the latest $300 billionU.S. tariffs, but also called on the U.S. to meet it halfway ona potential trade deal. urn:newsml:reuters.com:*:nL4N25B2NR

* On Thursday, U.S. President Donald Trump said he believedChina wanted to make a trade deal, and that the trade conflictwould be fairly short. urn:newsml:reuters.com:*:nL2N25B1TK

* Investors are focused on the Federal Reserve's annualsymposium next week. Traders see an about one-in-three chance ofa 50 basis-point rate cut by the Fed this September. FEDWATCH

* The European Central Bank's (ECB) Olli Rehn on Thursdayflagged the need for a significant easing package in September.The ECB is widely expected to cut interest rates by at least 10basis points when it meets next month. urn:newsml:reuters.com:*:nL8N25B4JM

* Mexico's central bank cut its key lending rate for thefirst time since June 2014 on Thursday. urn:newsml:reuters.com:*:nL2N25B1A7

* 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

(Reporting by Harshith Aranya in Bengaluru; editing by RichardPullin) ((harshith.aranya@thomsonreuters.com; Within U.S. +1 646 2238780, Outside U.S. +91 80 6749 6462; Reuters Messaging:harshith.aranya.thomsonreuters.com@reuters.net))






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