PRECIOUS-Gold gains as recession fears drive safe-haven demand

* 10-yr Treasury yields drop under 2-yr first time in 12
years
* SPDR Gold holdings jumped 0.9% on Wednesday
* U.S. retail sales data expected at 1230 GMT

(Updates prices)
By Brijesh Patel
Aug 15 (Reuters) - Gold prices rose on Thursday, as
investors flocked to safer havens after an inverted U.S. bond
yield curve pointed to new recession fears following poor
economic data from Germany and China.
Spot gold XAU= was up 0.2% at $1,519.51 per ounce as of
0522 GMT. On Tuesday, gold prices scaled its highest level since
April 2013 at $1,534.31.
U.S. gold futures GCcv1 gained 0.2% to $1,530.50 an ounce.
"We are seeing flight to safety, market confidence is a bit
shaky. We have been seeing that the economy is showing signs of
weakness and it's starting to slow in the second half of this
year," said Benjamin Lu, an analyst at Phillip Futures.
"A successful breakout at $1,525 per ounce will see gold
bulls make an attempt on previous highs of $1,535."
Yields on 10-year U.S. Treasury notes US10YT=RR fell below
the two-year yield US2YT=RR , intra-day, for the first time
since 2007. The inversion, which has historically signalled a
looming recession, triggered an extensive flight to safety.
US/
Fears of a global recession gripped financial markets around
the world as stocks slumped to more than two-month lows on
Thursday, tracking a Wall Street slide. MKTS/GLOB
"We have continued safe-haven buying with stock markets
looking pretty wobbly ahead of U.S. retail sales data, which is
really important," OANDA analyst Jeffrey Halley said.
"The U.S. is the last man standing amongst Europe and China.
We could see an outsized reaction overnight if data comes in
ugly, which should help gold again."
Economic data from China and Germany suggested a faltering
global economy, hit by the worsening U.S.-China trade war,
Brexit and geopolitical tensions. Gold, which pays no interest of its own, is often used as a
hedge against political and financial risks.
Markets are anticipating U.S. retail sales data due later in
the day, which could serve as an indicator of the strength of
the world's largest economy.
On the trade front, senior U.S. officials said on Wednesday
that China has made no trade concessions after the United States
delayed tariffs on some Chinese imports, the latest sign that
the trade saga is going nowhere. Investors are focused on the Federal Reserve's annual
symposium next week. Traders see a 63.7% chance of a 25
basis-point rate cut by the Fed this September. FEDWATCH
Lower U.S. interest rates put pressure on the dollar and
bond yields, increasing the appeal of non-yielding bullion.
Holdings of SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, rose 0.9% to 844.29 tonnes on
Wednesday. GOL/ETF
Among other precious metals, silver XAG= rose 0.6% to
$17.31 per ounce.
Platinum XPT= gained 0.4% to $844 an ounce and palladium
XPD= climbed 0.8% to $1,435.06.