* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* MSCI ACWI flat, set for best first half since 1997
* Trump-Xi meeting at G20 in focus
* Dollar set for weakest month since start of 2018
* Gold gains
LONDON, June 28 (Reuters) - Stocks eked out meagre gains on Friday before a meeting on trade between U.S. President Donald Trump and Chinese President Xi Jinping, capping gains on the best first half for global equities since 1997.
After stock markets slipped in Asia, European shares were higher, with the pan-European STOXX 600 index up 0.27% by midday in London. Germany's DAX index was the biggest gainer, up 0.36% percent on the day.
Trump and Xi will meet during a Group of 20 summit this weekend in Osaka, Japan, for talks that could help resolve a year-long trade war between China and the United States, as signs proliferate of rising risks to global growth.
MSCI's All Country World Index, which tracks shares in 47 countries, was up just 0.06% on the day, but heading for its best first half since 1997.
The index was set to break a three-week streak of gains but also on course for its best month since January, gaining nearly 6% in June as equities rallied after major central banks pivoted towards easier monetary policy.
That shift came as trade negotiations between the United States and China broke down earlier this year. Now markets are betting on an interest rate cut by the U.S. Federal Reserve as early as the next policy meeting in July.
On Thursday, China's central bank pledged to support a slowing economy, before the release of data that is expected to show China's factory activity slowed for a second consecutive month in June.
"Market participants are taking a cautious approach ahead of this high-level meeting as hopes for a material breakthrough are low," said Konstantinos Anthis, head of research at ADSS.
"This is a stellar opportunity for the two leaders to find some common ground and unless they do so, equities will likely push lower as a prolonged period of tariffs on each other's exports will take a heavier toll on both economies and global growth."
Futures indicated a positive open on Wall Street.
Currency markets also reflected caution, with the Japanese yen reversing a three-day losing streak against the dollar.
The U.S. currency was down 0.1% against a basket of other currencies and set to turn in its weakest monthly performance since the start of 2018. Bets on interest rate cuts from the Fed have pushed the dollar index down 1.7% this month.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2%. Japan's Nikkei stock index ended down 0.29%.
Chinese blue chips fell 0.24% on Friday and Hong Kong's Hang Seng lost 0.32%. Australian shares shed 0.71%.
White House economic adviser Larry Kudlow said on Thursday that Trump had agreed to no preconditions for the meeting with Xi and is maintaining his threat to impose new tariffs on Chinese goods.
Kudlow also dismissed a Wall Street Journal report that China was insisting on lifting sanctions on Chinese telecom equipment maker Huawei Technologies Co Ltd as part of a trade deal and that the Trump administration had tentatively agreed to delay new tariffs on Chinese goods.
"People don't know what to think before the upcoming meeting, so we're likely to see a lot of instability, uncertainty and a general lack of direction, which will be resolved only at the end of the weekend," said Josh Mahoney, market analyst at IG in London.
"I'd err on the side of caution. We aren't going to see a major breakthrough on trade but maybe we will see plans for further discussions down the line and that in itself could give some sort of boost to markets to say it's not necessarily over quite yet."
Elsewhere, euro zone government bond yields hovered near record lows in many cases before the release of inflation data for the bloc. Expectations are for inflation of 1.2% in June -- short of the European Central Bank's target of just below 2% -- so investors held on to government bonds in early trade.
In commodity markets, trade worries continued to weigh on oil. Benchmark Brent crude was down 0.05% to $66.52 per barrel.
The weak dollar and uncertainty over trade saw gold recover after dipping below $1,400 per ounce on Thursday. Spot gold was last traded at $1,413.81 per ounce, up 0.33%, but down from earlier highs. (Reporting by Ritvik Carvalho; additional reporting by Andrew Galbraith in Shanghai and Amy Karen Daniel in Bangalore; editing by Larry King)