By Eric Onstad
LONDON (Reuters) - Gold prices slumped to three-week lows on Friday as disappointed speculators liquidated long positions despite fresh trade skirmishes between the United States and China.
Some investors had taken long positions ahead of key central bank decisions this week, but gold only briefly surged to a one-month peak on Thursday of $1,309.30 before retreating when the dollar strengthened.
"After it was clear today that gold had failed to clear the $1,300 level, people rushed to the exit," a trader in Europe said.
Spot gold was down 1.4 percent at $1,283.60 per ounce at 1400 GMT, its weakest since May 21, while U.S. gold futures for August delivery slid 1.7 percent to $1,235.80 per ounce.
"The dollar has been waking up to some renewed strength and that's largely been held onto today," said Jonathan Butler, commodities analyst at Mitsubishi in London.
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The dollar index , was slightly firmer after hitting the highest since November last year. [USD/]
Gold deepened losses after President Donald Trump on Friday announced that the United States will implement a 25 percent tariff on $50 billion of goods from China and Beijing quickly said it would hit back with its own tariffs.
Analysts had expected gold to be bolstered by the prospects of a trade war.
The International Monetary Fund said on Thursday that Trump's new tariffs threatened to undermine the global trading system, would prompt retaliation by other countries and damaged the U.S. economy.
Global and U.S. equities have failed to revisit their record highs despite some strong first-quarter profit reports, stoking fears of a correction, which may benefit gold, Butler said.
In other precious metals, silver fell 2.2 percent to $16,76 an ounce, a day after it hit its highest since April 19 at $17.32 an ounce.
The gold/silver ratio had moved sharply lower over the past two weeks from 79.4 to 75.9 on Thursday, the lowest since last November as silver has outperformed gold.
The ratio bounced on Friday as investors took profits after a strong run in silver," Butler said.
Platinum fell 0.6 percent to $894.60 an ounce and palladium shed 1.4 percent to $994 and was on course for its first weekly decline in four.
(Additional reporting by Karen Rodrigues and Swati Verma in Bengaluru; Editing by Edmund Blair and David Evans)