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Trump hits dozens of countries with steep tariffs

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US dollar index hovers near two-month high

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US inflation picks up in June

(Updates for Asia morning hours)

By Anmol Choubey

Aug 1 (Reuters) -

Gold prices traded flat on Friday, but were on track for a

weekly loss as pressure from a stronger dollar outweighed

support from trade uncertainty caused by U.S. tariffs.

Spot gold was steady at $3,287.65 per ounce, as of

0242 GMT. Bullion is down 1.5% so far this week.

U.S. gold futures eased 0.3% to $3,337.20.

The dollar index hit its highest level since May 29,

making gold more expensive for other currency holders.

"Gold has been in a $3,250 to $3,450 range for about two

months now and we see it heading towards the bottom end of the

range and perhaps breaking it," said Marex analyst Edward Meir,

adding that the dollar's strength was driven by the Federal

Reserve's hawkish stance, which also weighed on the bullion.

The Fed held interest rates steady in the 4.25%-4.50% range

on Wednesday and dampened hopes for a September rate cut.

Trump signed an executive order on Thursday imposing

"reciprocal" tariffs ranging from 10% to 41% on imports from

dozens of countries and foreign locations ahead of a Friday

trade deal deadline.

He increased duties on Canadian goods to 35% from 25% for

all products not covered by the U.S.-Mexico-Canada trade

agreement, but gave Mexico a 90-day reprieve to negotiate a

broader deal.

"If various countries cannot renegotiate these tariff rates

lower, we could see prices move higher again if trade tensions

increase," Meir said.

Meanwhile, U.S. inflation increased in June as tariffs on

imports started raising the cost of some goods.

Focus now shifts to U.S. jobs data due later in the day for

more cues on Federal Reserve's rate-cut path.

Gold thrives in a low-interest rate environment as it is a

non-yielding asset.

Spot silver fell 0.6% to $36.53 per ounce, platinum

was down 0.2% to $1,291.55 and palladium held

steady at $1,191.95. All three metals were headed for weekly

losses.