Gold steady amid trade tensions, eyes on U.S. Fed

BENGALURU, Sept 25 (Reuters) – Gold was steady on Tuesday amid simmering U.S.-China trade tensions after a new set of tariffs came into effect, while investors stuck to the sidelines ahead of a U.S. Federal Reserve meeting.

FUNDAMENTALS

* Spot gold was barely changed at $1,198.28 by 0056 GMT.

* U.S. gold futures were down 0.2 percent at $1,202.60 an ounce.

* Investors await details from the two-day Federal Reserve meeting beginning on Tuesday, when the U.S. central bank is expected to raise benchmark interest rates and shed light on the path for future rate hikes.

* Higher U.S. interest rates typically pressure gold, since it costs to store and insure, but does not pay interest.

* The United States and China imposed fresh tariffs on each other’s goods as the world’s biggest economies showed no signs of backing down from a trade dispute that is expected to knock global economic growth.

* Although gold is generally considered to be a safe-haven asset, the months-long trade rift between Washington and Beijing has instead prompted investors to buy U.S. dollars in the belief that the United States has less to lose from the dispute.

* The dollar index against a basket of six major currencies edged up 0.1 percent to 94.254.

* Speculators increased their net short position in COMEX gold contracts in the week to Sept. 18, U.S. data showed on Friday.

* Palladium hit its highest since Feb. 27 at $1,060.70 on Monday and was last steady at $1,058.

* India is likely to increase import duties on precious stones, certain types of steel and electronics but will spare gold to prevent smuggling, a finance ministry official said on Monday.

* Canada’s Barrick Gold Corp has agreed to buy Randgold Resources Ltd in an all-stock deal valuing the Africa-focused miner at $6.5 billion, to create the world’s largest gold producer in an industry under investor pressure to put capital to good use.

* Unidentified assailants on Sunday kidnapped three people working at a gold mine run by Ghana-based Balaji in northeastern Burkina Faso, near the border with Mali, a company official told Reuters on Monday. (Reporting by Nallur Sethuraman in Bengaluru; editing by Richard Pullin)