* Trump faces backlash on tariff imposition
* Dollar index eases 0.2 pct, stock markets bounce
* GRAPHIC-2018 asset returns: http://tmsnrt.rs/2jvdmXl
(Updates throughout, adds LONDON dateline) LONDON, March 6 (Reuters) - Gold edged higher on Tuesday as uncertainty over the prospect of a trade war breaking out over proposed U.S. sanctions on steel and aluminium imports boosted interest in the metal as a safe store of value, and kept the dollar under pressure. The metal remained hemmed into a narrow range, however, as a continued recovery in stock markets detracted some investment interest from bullion.
Spot gold was up 0.4 percent at $1,324.96 an ounce at 1045 GMT, while U.S. gold futures for April delivery
were 0.5 percent higher at $1,326.30 an ounce. Stock markets clawed back lost ground as U.S. President Donald Trump faced pressure from political allies to pull back from the tariffs he proposed last week, a move that sparked a drop in equities and the dollar. A spokesman for U.S. House of Representatives Speaker Paul Ryan said last week that Ryan hoped Trump would consider the "unintended consequences" of tariffs, while White House economic adviser Gary Cohn was reported to have arranged a meeting with executives of U.S. companies that use the metals. "The uncertainty created by Trump is once again coming in to support gold," Saxo Bank's head of commodity research Ole Hansen said. "Both Ryan and Cohn are attempting to halt the process, but we will have to wait and see what the final decision on these tariffs is going to be. "Overall, it carries the risk of raising price pressures in the U.S., thereby (feeding) inflation," Hansen said. "At this point gold is doing well, and that does point to underlying demand." Worries over a potential trade war have eased somewhat in recent days, with market participants coming to view Trump's proposed tariffs more as a negotiating tactic. Trump is expected to finalise the planned tariffs later in the week. Uncertainty over the U.S. position on trade was enough to keep the dollar on the back foot on Tuesday, however, down 0.2
percent against a currency basket . That supported gold,
along with other assets priced in the U.S. unit. "In the near term, given the unpredictable nature of current market sentiment, investors will continue to buy gold on dips to hedge the growing tail risk from Trump's controversial policies," said Stephen Innes, APAC trading head at OANDA.
Among other precious metals, silver was up 0.7 percent at $16.55 an ounce, platinum was 0.2 percent lower at $962.40 an ounce and palladium was down 0.4
percent at $979 an ounce.
(Additional reporting by Eileen Soreng in Bengaluru, editing by Ed Osmond)