July 8 (Reuters) - Gold prices steadied on Tuesday as

U.S. President Donald Trump announced sharply higher tariffs on

goods from Japan, South Korea and other nations, while higher

U.S. treasury yields capped gains.

FUNDAMENTALS

* Spot gold fell 0.1% to $3,331.89 per ounce as of

0035 GMT. U.S. gold futures were steady at $3,341.80.

* On Monday, Trump began telling trade partners, including

Japan and South Korea, that sharply higher U.S. tariffs would

start on August 1, marking a new phase in the trade war he

launched earlier this year.

* The August 1 effective date for U.S. tariffs was firm,

Trump emphasised but added he was open to extensions if

countries made proposals.

* "Reciprocal tariffs" were capped at 10% until July 9 to

allow for negotiations, but only agreements with Britain and

Vietnam have been reached so far.

* The yield on benchmark U.S. 10-year notes

hovered near a two-week high, while the U.S. dollar index

shed 0.1%.

* A higher yield increases the opportunity cost of holding

non-yielding bullion, while a weaker dollar makes it more

affordable for holders of other currencies.

* The Trump administration will not immediately impose a new

10% tariff against members of the developing nation BRICS bloc

but will proceed if countries take so-called "anti-American"

policy actions, according to a source familiar with the matter.

* Trump's tariff policies have stoked inflation fears,

further complicating the Federal Reserve's path to lower

interest rates. The minutes of its June meeting, expected on

Wednesday, should offer more clues into its policy outlook.

* A paper published jointly by the San Francisco and New

York Federal Reserve banks suggests the possibility of the Fed

cutting its short-term rate target to near-zero levels in the

coming years despite current relatively high borrowing costs.

* Spot silver lost 0.5% to $36.74 per ounce, platinum

shed 1.5% to $1,370.46 and palladium fell 2.1% to

$1,170.46.