By Eileen Soreng
May 28 (Reuters) - Gold on Tuesday slipped from the previous session's one-week peak, pulled down by a firm dollar as the currency was the preferred safe-haven amid uncertainty over U.S.-China trade tensions.
Spot gold XAU= fell 0.5% to $1,278.12 per ounce by 2 p.m. ET (1800 GMT), having touched its highest since May 17 at $1,287.32 in the previous session.
U.S. gold futures GCcv1 settled down 0.5% at 1,277.10 per ounce.
"The most important force in the market at the moment is the U.S.-China trade tensions and once again we see the dollar benefiting from safe-haven flows rather than gold," said Suki Cooper, precious metals analyst at Standard Chartered Bank.
"It's going to be a very difficult hurdle for gold to reach the $1,300 level and that might not happen until we see more seasonal demand coming into play or if the dollar strength starts to ease, which we don't think will happen till later in the year."
The dollar .DXY rose 0.3% against a basket of other leading currencies, supported by trade and political worries and a strong rise in U.S. consumer confidence. USD/
U.S. President Donald Trump said on Monday at a news conference with Japanese Prime Minister Shinzo Abe that he was "not ready to make a deal with China," denting hopes of a trade agreement between the world's biggest economies.
Further weighing on the bullion prices was a firm U.S. equities market propped up by the technology sector. .N
Signals are mixed for spot gold as it failed twice to break resistance at $1,286 per ounce, according to Reuters technical analyst Wang Tao.
Meanwhile, COMEX gold speculators cut net long position by 41,545 contracts to 24,378 in week to May 21, the U.S. Commodity Futures Trading Commission said on Friday. CFTC/
The longs that were bought during the past couple of days are now being sold back following the break below $1,292.6 and $1,286, said Saxo Bank commodity strategist Ole Hansen.
Elsewhere, silver XAG= was down 2% at $14.30 per ounce, having hit a low since Dec. 3 at $14.25 earlier in the session.
The gold-silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, climbed to its highest level since 1993 at around 89.
"Silver has underperformed notably of late amid directionless gold prices, weakness in industrial metals, and a lack of compelling fundamental reasons to participate in thesilver market" UBS strategist Joni Teves wrote in a note.
Speculators boosted their net short position in silver in week to May 21, the CFTC data showed.
Palladium XPD= climbed 0.6% to $1,344.14 per ounce, after hitting its highest since May 15 at $1,349. Platinum XPT= fell 1.2% to $796.03.
GRAPHIC: Gold prices technical charthttps://tmsnrt.rs/2I1UB7F
GRAPHIC-Speculators' positions in commodities http://graphics.thomsonreuters.com/11/02/cftc.html
(Reporting by Eileen Soreng and Brijesh Patel in Bengaluru; Editing by Steve Orlofsky and Lisa Shumaker)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.