*

Gold backs down but remains above $3,000 an ounce

*

Fed's cautious tone provides dollar support

*

Investor focus turns to details of Trump's reciprocal

tariffs

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Nasdaq breaks four-week losing streak

(Updates to U.S. market close)

By Stephen Culp

NEW YORK, March 21 (Reuters) - Wall Street edged higher

and the dollar gained ground on Friday after U.S. President

Donald Trump hinted he would be flexible regarding a new round

of tariffs expected to be imposed early next month.

Even so, lingering economic uncertainties and churning

geopolitical tension kept investors cautious.

All three major U.S. stock indexes reversed their losses

after Trump's announcement, but their gains were held in check

by weakness in economically sensitive sectors, such as chips

, materials and small caps.

All three indexes registered weekly gains.

Gold was off sharply from its all-time high but remained

above $3,000 per ounce, a level it breached last week for the

first time.

"Clearly these are challenging times for investors," said

Terry Sandven, Chief Equity Strategist at U.S. Bank Wealth

Management in Minneapolis. "With volatility and uncertainty on

the rise, angst is swaying sentiment, while tariffs and their

associated implications are rattling consumer and investor

confidence."

Chicago Federal Reserve President Austan Goolsbee and New

York Fed President John Williams said it would be premature to

gauge the economic effects of U.S. President Trump's tariff

actions, and the central bank has time to determine the

direction of its monetary policy.

A spate of central bank policy meetings held investors'

focus for much of the week, with the Fed, the Bank of Japan and

the Bank of England all holding rates steady.

The common theme among monetary policymakers was caution,

with most adopting a "wait and see" stance toward Trump's

tariffs and trade policy, which has fostered what Fed Chair

Jerome Powell called "unusually elevated" uncertainty.

Investors await clarification on details of Trump's

reciprocal tariffs expected to take effect on April 2.

Israeli airstrikes on Gaza and a huge blast from a Ukrainian

drone attack on a Russian military airfield also dampened risk

appetite and raised the appeal of safe-haven assets.

"The number of factors that have the potential to impact

investor sentiment has risen and this is fueling uncertainty,"

Sandven added. "Global tensions are heightened, valuation is

elevated, and company guidance is measured."

"That's the teeter-totter we're seeing in the broader

market."

Adding to the turmoil, Britain's Heathrow Airport was shut

due to a huge fire at a nearby electrical substation. Markets

watched for financial fallout from the detention of Turkish

President Tayyip Erdogan's main political rival. Eyes were also

on Germany's massive fiscal stimulus package, on track to pass

the Bundesrat upper house of parliament on Friday.

U.S. economic indicators in the coming week will include

housing and industrial data. On Thursday, the Commerce

Department will give its third and final take on fourth-quarter

GDP. Its Personal Consumption Expenditures report is due on

Friday.

The Dow Jones Industrial Average rose 31.88 points,

or 0.08%, to 41,985.20, the S&P 500 rose 4.55 points, or

0.08%, to 5,667.44 and the Nasdaq Composite rose 92.43

points, or 0.52%, to 17,784.05.

European shares slipped, yet the STOXX Euro 600 nabbed a

weekly gain, extending its year-to-date outperformance.

MSCI's gauge of stocks across the globe fell

1.47 points, or 0.17%, to 842.01.

The pan-European STOXX 600 index fell 0.6%,

while Europe's broad FTSEurofirst 300 index fell 12.99

points, or 0.59%.

Emerging market stocks fell 9.49 points, or

0.83%, to 1,131.20. MSCI's broadest index of Asia-Pacific shares

outside Japan closed lower by 0.81%, to 588.59,

while Japan's Nikkei fell 74.82 points, or 0.20%, to

37,677.06.

The dollar gained ground against the euro, ending the week

higher as the approaching tariff deadline prompted caution.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

rose 0.33% to 104.13, with the euro down 0.32% at

$1.0816.

Against the Japanese yen, the dollar strengthened

0.37% to 149.33.

U.S. 10-year Treasuries turned higher to snap a four-day

streak of declines as investors weighed tariff uncertainties

against the probability that the Fed will hold rates steady for

the time being.

The yield on benchmark U.S. 10-year notes rose

1.9 basis points to 4.252%, from 4.233% late on Thursday.

The 30-year bond yield rose 3.9 basis points

to 4.5948% from 4.556% late on Thursday.

The 2-year note yield, which typically moves

in step with interest rate expectations for the Federal Reserve,

fell 0.9 basis points to 3.948%, from 3.957% late on Thursday.

Crude oil prices edged higher and appeared set to notch a

second straight weekly gain as new U.S. sanctions on Iran and

the latest OPEC+ output plan raised expectations of tighter

supply.

U.S. crude rose 0.31% to settle at $68.28 per barrel,

while Brent settled at $72.16 per barrel, up 0.22% on

the day.

Gold paused its record run, dipping in opposition to the

stronger dollar, but notched its third weekly gain.

Spot gold fell 0.8% to $3,020.10 an ounce. U.S. gold

futures fell 0.58% to $3,022.50 an ounce.