Gold near 1-week highs as Sino-U.S. trade talk hopes hurt dollar

BENGALURU (Reuters) - Gold prices held steady on Thursday after hitting more than one-week highs the session before, with hopes for a new round of U.S.-China trade talks weighing on the dollar.

A report that the Trump administration has reached out to China for trade talks raised hopes of a subtle shift in Washington's policy.

FUNDAMENTALS

* Spot gold was firm at $1,205.66 an ounce at 0055 GMT, after hitting its highest since Aug. 31 at $1,208.48 on Wednesday.

* U.S. gold futures were also mostly steady at $1,211.10 an ounce.

* Senior U.S. officials led by Treasury Secretary Steven Mnuchin recently sent an invitation to their Chinese counterparts, including Vice Premier Liu He, to hold another bilateral trade meeting.

 

* The outreach comes as more than 85 U.S. industry groups launched a coalition on Wednesday to take a fight public against President Donald Trump's trade tariffs.

* The months-long trade rift between U.S. and China has prompted investors to buy the U.S. dollar in the belief that the United States has less to lose from the dispute, making dollar-priced gold more expensive for non-U.S. buyers.

* The dollar index against a basket of six major currencies stood little changed at 94.806 after declining about 0.5 percent the previous day. [USD/]

* Meanwhile, expectations that the U.S. Federal Reserve will raise interest rates in September has made some investors cautious on gold.

* Higher rates increase bond yields, making non-yielding bullion less attractive, and tend to boost the dollar.

* Barrick Gold Corp will eliminate the executive role of Chief Innovation Officer as part of a broad decentralization push, the company said on Wednesday, adding that it would continue to work on innovation and productivity improvements.

* Canadian miner New Gold Inc is exploring a sale as it grapples with ballooning development costs and operating challenges at its new mine, people familiar with the situation told Reuters.

* Chinese conglomerate Fosun International Ltd is in discussions to buy British-based commodities broker Marex Spectron, two industry sources said.

* Canada's Yamana Gold Inc said on Wednesday Argentina's proposal to impose new tax on exports could hurt its cash flow despite the company taking steps to mitigate the impact.

* Polyus, Russia's largest gold producer, is on track to boost production to 2.8 million troy ounces and to reduce its capital expenditure in 2019, its Chief Executive Pavel Grachev told Reuters.

DATA AHEAD (GMT)

1100 Bank of England announces interest rate decision

1145 European Central Bank announces interest rate decision

1230 ECB President Mario Draghi holds news conference

1230 U.S. Consumer prices Aug

1230 U.S. Weekly jobless claims

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Joseph Radford)