PRECIOUS-Gold hits over 7-month peak as Huawei case sparks risk-off sentiment

An image of a person looking at financial reports Credit: Shutterstock photo

* United States charges Huawei with bank, wire fraud

* SPDR Gold holdings rose to highest since June on Mon (Adds comment, updates prices)

By Sethuraman N R

Spot gold XAU= rose to its highest since June 14, 2018 at$1,304.53 in morning trade and was firm at $1,304 per ounce by0555 GMT. U.S. gold futures GCv1 were also steady at $1,302.70per ounce.

"Investors are very cautious with many uncertainties onU.S.-China trade talks and Brexit. Huawei is at the centre ofdispute, creating very noisy background for the trade talks,"said Margaret Yang, a market analyst at CMC Markets.

"All these are making it more difficult for investors tojudge the market's direction. Money is fleeing into assets suchas gold, seeking safety."

The United States on Monday charged Huawei, its chieffinancial officer and two affiliates with bank and wire fraud toviolate sanctions against Iran in a case that has escalatedtensions with Beijing.

Investors fear the charges could complicate high-level tradetalks set to begin on Wednesday where Chinese Vice Premier LiuHe will meet with U.S. Trade Representative Robert Lighthizerand others.

The dollar index .DXY , a gauge of its value versus sixmajor peers, held close to a two-week low, while Asian sharesfell. MKTS/GLOB

Meanwhile, the U.S. Federal Reserve's two-day policy meetingbegins later in the day, where the central bank is expected toleave interest rates unchanged.

The Fed raised interest rates four times last year, but someofficials have said they will be patient in raising rates giventhe stalemate over global trade, the U.S. federal governmentshutdown, and waning business and consumerconfidence.

Gold tends to rise on expectations of lower interest rates,which reduce the opportunity cost of holding non-yieldingbullion.

The yellow metal has risen over 12 percent since touching amore than 1-1/2-year-low in August mostly due to volatile stockmarkets and a softer dollar on the back of expectations that theFed will pause its multi-year rate-hike cycle.

Reflecting investor sentiment in bullion, holdings of SPDRGold TrustGLD , the world's largest gold-backedexchange-traded fund (ETF), rose 0.73 percent to 815.64 tonneson Monday, their highest since June 2018. GOL/ETF

"ETF interest remains supportive to the yellow metal, whilea number of ongoing geopolitical concerns continue to facilitatetop-side momentum," MKS PAMP Group said in a note.

In other metals, palladium XPD= was steady at $1,331 perounce. Prices hit a record high of $1,434.50 on Jan. 17.

Silver XAG= was firm at $15.74 per ounce, while platinum XPT= slipped 0.1 percent to $808.50. (Reporting by Nallur Sethuraman and Karthika Suresh Namboothiriin Bengaluru; editing by Richard Pullin and Subhranshu Sahu) ((; (Within U.S.1-651-848-5832, Outside U.S. +91 8067496031); Reuters

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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