PRECIOUS-Gold prices edge higher on softer U.S. dollar

March 28 (Reuters) - Gold prices edged higher on Wednesday buoyed by a softer dollar, a day after the yellow metal recorded its biggest one-day percentage fall in nearly two weeks as U.S.-China trade spat concerns eased.

FUNDAMENTALS

* Spot gold was up 0.2 percent at $1,346.96 per ounce at 0135 GMT. Prices dropped 0.6 percent on Tuesday, their biggest one-day percentage decline since March 15.

* U.S. gold futures for April delivery rose 0.3 percent to $1,346.20 per ounce..

* Against a basket of six other major currencies, the dollar

index was down 0.1 percent at 89.276. * Asian shares pulled back on Wednesday as Wall Street was

knocked hard on concerns about tighter regulations on the tech industry.

* The United States sparred with China at the World Trade Organization on Tuesday over the legality of U.S. tariffs in response to alleged theft of U.S. intellectual property.

* The head of the Federal Reserve Bank of Atlanta, Raphael Bostic, waded into a potentially contentious debate at the U.S. central bank on Tuesday over whether to replace its 2 percent inflation target, saying he favours a new and nearly untested monetary policy strategy known as price-level targeting.

* Underlying inflation in the euro zone may remain lower than expected even if growth is robust, so the European Central Bank needs to remain patient in removing stimulus, Governing Council member Erkki Liikanen said on Tuesday.

* Economic sentiment in the 19 countries sharing the euro slipped for the third month in a row in March, data from the European Commission showed on Tuesday, suggesting economic growth in the bloc was not as steady as previously thought.

* British Prime Minister Theresa May called on Tuesday for a "long-term response" by the West to the security threat from Russia as NATO followed member states in expelling Russian diplomats over the poisoning of a double agent in England.

* SPDR Gold Trust , the world's largest gold-backed

exchange-traded fund, said its holdings fell 0.14 percent to 846.12 tonnes on Tuesday from 847.30 tonnes on Monday.

* China's net gold imports via main conduit Hong Kong plunged 35.5 percent in February from the previous month, data showed on Tuesday.

* Bullion investors, miners and makers of coins will help drive the fifth straight annual increase in total global gold investment in 2018, CPM Group said in its Gold Yearbook 2018 on Tuesday, citing geopolitical tensions and fears that the bubbling U.S. economic expansion will end in a 2019 recession.

(Reporting by Eileen Soreng in Bengaluru, Editing by Sherry Jacob-Phillips)