* Gold finds strong resistance at $1,200 -ANZ
* Silver hits 2-1/2 year low
* Palladium off multi-week highs hit on Monday
(Updates prices, headline; adds comment, second byline, NEWYORK to dateline)By Renita D. Young and Maytaal AngelNEW YORK/LONDON, Sept 11 (Reuters) - Gold turned positive onTuesday as investors bought when it approached $1,200 per ounce.But bullion remained under pressure after hitting a two-week lowand the dollar resumed its ascent amid broad risk-off sentiment,looming U.S. interest rate risesand prospects for escalatingU.S.-China trade tensions.Silver also succumbed to the market pressures, hitting a2-1/2 year low.
Investors began purchasing more gold as it crept toward thepsychologically-important $1,200 level, said Phil Streible,senior commodities strategist at RJO Futures in Chicago.
"Some investors see below $1,200 as a small window to buy,because historically we haven't seen gold remain below $1,200since late December 2016, even though I think it's going to godown to match those previous lows," he said.Spot gold gained 0.2 percent at $1,197.28 per ounceby 1:49 p.m. EDT (1749 GMT). U.S. gold futures forDecember delivery settled up $2.40, or 0.2 percent, at $1,202.20per ounce.
"Higher real yields are stimulating the dollar, but gold ispretty subdued, which to me, means there's a little bit ofbalance," said Rob Haworth, senior investment strategist forU.S. Bank Wealth Management.The dollar edged up versus a basket of major currencies.Later in trade, the greenback backed off its earlier highs,which helped push gold higher. Since its April peak gold has dropped more than 10 percentas a trade war between China and the U.S. has driven investorsto seek safety in the dollar rather than in gold, a traditionalsafe haven.
Bearish bets on Comex gold have risen to record levels whileinvestors have liquidated exchange-traded gold fund holdings.Broadly underpinning the greenback were Friday's commentsfrom U.S. President Donald Trump that he was ready to imposetariffs on virtually all Chinese imports to the United Statesand strong U.S. jobs data. The jobs data last week cemented expectations that theFederal Reserve will raise U.S. interest rates in September. Higher interest rates increase bond yields, makingnon-yielding bullion less attractive. They also tend to boostthe dollar, making dollar-priced gold costlier for non-U.S.investors.Gold is finding strong resistance at $1,200, with investorsselling into any rallies that threaten to push it above thatlevel, ANZ analysts said in a research note.Silver fell 0.4 percent at $14.10 per ounce, havinghit its lowest since January 2016 at $13.90.Platinum gained 0.6 percent at $786.99 per ounce,while palladium lost 0.4 percent at $971.49 after hittingits highest in nearly 12 weeks at $991.15 on Monday. (Additional reporting by Nallur Sethuraman in BengaluruEditing by David Goodman and Kirsten Donovan)
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