* Gold up 0.8% so far this week, set for 4th weekly gain
* Palladium set for biggest weekly gain since September 2018
* GRAPHIC-2019 asset returns: (Adds comment, updates prices)By Eileen SorengJune 14 (Reuters) - Gold hit its highest since April lastyear on Friday as political tensions in the Middle East and weakeconomic data from China and the United States pushed it above$1,350.
Spot gold was up 0.7% at $1,351.16 per ounce at 1247GMT, after hitting its highest since April 2018 at $1,358.04earlier in the session.Prices have risen 0.8% so far this week, keeping the metalon track for its fourth consecutive weekly gain. U.S. goldfutures climbed 1% to $1,356.9 an ounce."In people's minds there is a sense of a deeply darkeningmacroeconomic backdrop, in particular the likelihood that theU.S. will drop interest rates quite soon," said Ross Norman,chief executive at bullion dealer Sharps Pixley.Investors are getting ahead of the curve by buying gold inexpectation the U.S. Federal Reserve will have to reverse itsprevious tightening policy, by extension pressuring the dollarand lifting gold, Norman said.
China's industrial output growth slowed to a more than17-year low of 5% in May, the latest sign of weakening demand inthe world's second-largest economy as the U.S. ramps up tradepressures. The impact of the U.S.-China trade war was also evident inthe U.S. labour market, which saw an unexpected rise in thenumber of Americans filing applications for unemployment overthe last week. Recent soft U.S. economic readings have also boostedexpectations of a Fed rate cut. In addition to weighing on thedollar, lower interest rates also cut the opportunity cost ofholding non-yielding bullion.Meanwhile, world stocks struggled as Chinese data rekindledconcerns over the global economy, while fears of a new U.S.-Iranconfrontation intensified. Iran has rebuffed blame from Washington for this week'sattacks on two oil tankers in the Gulf of Oman, and affirmed itsresponsibility for security in the Strait of Hormuz, throughwhich almost a fifth of the world's oil passes, state radioreported. The price action of gold is attracting new investors and afresh multi-year high is a possibility, said Ronan Manly, aprecious metals analyst at BullionStar Singapore.
"This would bring momentum to the gold price and would spurfurther western gold demand, but could bring in more sellingfrom the East."Elsewhere, silver gained 1% to $15.04, while platinum was up 0.2% at $808.95.Palladium rose 0.8% to $1,455.80 after hitting itshighest since April 29 at $1,466.05 earlier in the session.The autocatalyst metal has risen about 7% so far this week,its biggest weekly gain since the week ended Sept. 21, 2018. (Reporting by Eileen Soreng in Bengaluru; Editing by Jan Harveyand Mark Potter)
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