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Spot gold XAU= rose 0.3 percent to $1,302.50 per ounce at0744 GMT. It earlier hit a high of $1,303.38 an ounce, its bestsince May 31.

U.S. gold futures GCcv1 for August delivery rose 0.4percent to $1,306 per ounce.

·         Dollar is under pressure, so gold is doing well thismorning, a Hong Kong-based trader said.

The dollar index .DXY , which measures the greenbackagainst a basket of six major currencies, was down 0.4 percentat 93.388. USD/

·         "Reports that President Trump was preparing to put tariffson billions of dollars of Chinese goods as soon as Friday raisedconcerns in the market that economic growth would be impacted.This saw some safe-haven buying emerge," ANZ said in a note.

U.S. President Donald Trump will meet with his top tradeadvisers on Thursday to decide whether to activate threatenedtariffs on Chinese goods.

"Investor demand was also supported by a slightly weakerU.S. dollar in the wake of the Fed decision to raise interestrates," ANZ said.

·         The U.S. Federal Reserve raised interest rates on Wednesday,and signalled two additional hikes by the end of this year,compared to one previously.

·         "It (rate hike) is all priced in and obviously there are alot of uncertainties looking past this which is supporting goldprices in our view," said Richard Xu, a fund manager at HuaAnGold, China's biggest gold exchange-traded fund.

·         "Its muted response to the Federal Reserve increase isbecause a lot of safe haven demand is going to take place... Thetrade war drama is not going to end anytime soon, it is probablygoing to be exasperated over the next month or so."

·         Meanwhile, China's central bank left borrowing costs forinterbank loans unchanged on Thursday, an unexpected decisionthat shrugged off the U.S. Federal Reserve's increase in itsbenchmark rate overnight.

·         The decision came as China reported "shockingly weak"activity data for May.

·         Markets are now looking forward to policy announcements fromthe European Central Bank (ECB) later in the day where the bankwill debate whether to end its huge asset purchases by year-end. urn:newsml:reuters.com

·         In other precious metals, silver XAG= climbed 0.6 percentto $17.09 an ounce, having earlier hit $17.14 an ounce, itshighest since April 20.

·         Platinum XPT= was 0.5 percent higher at $903.20 an ounce,while palladium XPD= gained 0.2 percent to $1,010.85 perounce.