* Trump imposes 10 pct tariffs on $200 bln goods from China
* Expectations of higher U.S. interest rates pressure gold
* GRAPHIC-2018 asset returns: (Recasts; updates prices, headline; adds comment, second bylineNEW YORK to dateline)By Renita D. Young and Zandi ShabalalaNEW YORK/LONDON, Sept 18 (Reuters) - Gold prices turnednegative on Tuesday as the dollar strengthened following newsthat China would retaliate against a new round of U.S. tariffson its goods. U.S. Treasuries also rose, helping boost thedollar but pressuring gold. China said that it had no choice but to retaliate againstnew U.S. trade tariffs, raising the risk that U.S. PresidentDonald Trump could soon impose duties on virtually all Chinesegoods that America buys. The U.S. dollar index strengthened against a basket of majorcurrencies. A stronger dollar generally weighs on the price ofdollar-denominated gold, which has been losing out on safe-havenflows to the greenback during the months-long U.S.-China tradeconflict. The dollar was negative earlier.
Spot gold dropped 0.23 percent at $1,197.75 per ounceby 1:33 p.m. EDT (1733 GMT) in choppy trade. U.S. gold futures for December delivery fell $3.30, or 0.3 percent, at$1,202.50.Gold prices have declined more than 12 percent since April,hurt by the intensifying trade dispute between the United Statesand China and as rising U.S. interest rates diminished demandfor non-interest-bearing bullion."I think there's a secondary factor where higher rates andreal rates are helping lift the dollar and that's puttingpressure on gold," said Rob Haworth, senior investmentstrategist for U.S. Bank Wealth Management.
Higher yields tend to lift the dollar and pressure gold,which costs to store and insure but does not pay interest.Investors are eyeing a meeting by the U.S. Federal Reservenext week at which interest rates are widely expected to beraised, said ActivTrades chief analyst Carlo Alberto De Casa.
"Any comments about the 2019 monetary policy could be a newsignificant driver for the precious metal," he said.
Gold prices were "hovering below massive resistance between
$1,205-$1,215 range", said FOREX.com analyst Fawad Razaqzada,pointing out that gold was still in a bearish trend.Investors trimmed their net short positions in Comex goldand silver in the week to Sept. 11, U.S. data showed on Friday. "One of the big problems that gold is facing is that it istrying to battle a mountain of pessimism," ETF Securitiesanalyst Nitesh Shah said.
"The speculative positioning in gold is down to its lowestlevels since 2001 ... gold is not behaving like the haven thatit is supposed to be."Spot silver lost 0.1 percent at $14.14 an ounce.Platinum rose 1.9 percent at $811.30, while palladium gained 2.7 percent at $1,010.72, reaching its highestsince mid-June at $1,012.50 an ounce. (Additional reporting by Nallur Sethuraman in Bengaluru;Editing by Jan Harvey and Cynthia Osterman)
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