By Brijesh Patel
(Reuters) - Gold hit a more than one-week peak on Monday as trade tensions between the United States and China lifted appetite for assets seen as a haven from risk, while weak U.S. economic data boosted hopes for a rate cut from the Federal Reserve.
Spot gold inched up 0.1% to $1,285.56 per ounce by 1147 GMT. The metal touched $1,287.32 earlier in the session, its highest since May 17.
U.S. gold futures were 0.1% higher at $1,285.30 an ounce.
U.S. President Donald Trump said on Monday he was "not yet ready" to make a deal with China, hinting that the world's biggest economies are far from a trade agreement.
"Some of the comments made by Trump over the trade talks with China were not overly optimistic," ING analyst Warren Patterson said.
"The continued uncertainty around trade is helping to support prices... that uncertainty is increasing demand for safe-haven assets."
China on Friday denounced U.S. Secretary of State Mike Pompeo for fabricating rumours after he said the chief executive of China's Huawei Technologies Co Ltd was lying about his company's ties to the Beijing government.
Weak manufacturing activity data coupled with a dip in new orders for U.S.-made capital goods last week ignited worries that the trade conflict may hurt the world's largest economy, lifting investor expectations for a U.S. rate cut.
Over the weekend, Trump reiterated a complaint that the Fed's policies had kept U.S. economic growth from reaching its full potential.
Investors also eyed European Parliament elections, where a two-party "grand coalition" of the conservative European People's Party (EPP) and the Socialists (S&D) lost their combined majority after a surge in support for liberals, the Greens and eurosceptic nationalists.
"The rise of volatility triggered by geopolitics benefited the yellow metal," Alfonso Esparza, senior market analyst at OANDA, said in a note.
"If the UK political game of thrones and U.S.-China trade keep uncertainty levels high, gold could once again jump above $1,300."
Gold may retest resistance at $1,290 an ounce, a break above which could lead to a gain to the next resistance at $1,295, Reuters technical analyst Wang Tao said.
Meanwhile, hedge funds and money managers sharply reduced their net long positions in COMEX gold in the week to May 21, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Among other precious metals, silver was up 0.2% at $14.59 per ounce.
Platinum rose 0.4% to $805.47 an ounce and palladium fell 0.6% to $1,327.26.
(Reporting by Brijesh Patel and Asha Sistla in Bengaluru; Editing by Jan Harvey)