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PRECIOUS-Gold gains after new U.S.-China tariffs; dollar caps upside

K. Sathya Narayanan

* SPDR Gold Trust holdings rise 12% so far this year

* Specs raise bullish stance in gold and silver- CFTC

* Gold could peak around $1,780/oz by end-2020: J.P. Morgan (Updates prices)

Sept 2 (Reuters) - Gold rose on Monday after the United States and China imposed new tariffs on each others' goods but a firmer dollar limited the precious metal's upside.

Washington began imposing 15% tariffs on a variety of Chinese goods on Sunday, including footwear, smart watches and flat-panel televisions, as Beijing began imposing new duties on U.S. crude.

However, U.S. President Donald Trump said both sides would still meet for talks later this month.

Spot gold was up 0.4% at $1,525.57 per ounce as of 1133 GMT, having fallen to a one-week low at $1,517.11 in the previous session.

U.S. gold futures were up 0.3% at $1,534.50 an ounce.

Trading could be subdued as U.S. financial markets are closed for the Labour Day holiday.

"Overall, there is nothing going on apart from the fact that the dollar is stronger. There was not so much reaction (in gold prices) as this (tariffs) was well anticipated," ABN Amro analyst Georgette Boele said.

Against key rivals, the dollar scaled a more-than two-year high earlier in the session, making gold costlier for investors holding other currency.

"We can expect a correction in gold prices as it had moved up so quickly that you don't need so much to trigger profit taking," Boele added.

The trade war, heightened fears over a global economic downturn, negative yielding debt around the globe and hopes for interest rate cuts by global central banks contributed to a rise of more than $100 for gold in August.

"Despite the recent rally, we do not yet think a recession is fully discounted in the gold price and we now see gold prices peaking at around $1,780 per ounce by year-end 2020 and averaging $1,418 in 2019 and $1,724 in 2020," Wall Street bank JP Morgan said in a note dated Aug. 28.

Meanwhile, holdings in the world's largest gold-backed exchange-traded fund (ETF), SPDR Gold Trust, have risen about 12% this year.

Speculators increased their bullish stance in COMEX gold and upped net long positions in silver contracts in the week to Aug. 27, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.

"At current levels, both the CFTC and ETF positions remain bullish and are likely to continue to be so over the near term should price action remain firm broadly around $1,500-$1,480," MKS PAMP said in a note.

Among other precious metals, silver gained 0.2% to $18.37 per ounce. Platinum slipped 0.3% to $928.45 per ounce, and palladium was down 0.2% at $1,528.54. (Reporting by K. Sathya Narayanan in Bengaluru; Editing by Susan Fenton)