* Gold hits $1,516.77/oz, highest since Oct 3
* Bullion in neutral range of $1,488-$1,514 -technicals
(Adds comment, details; updates prices)
By Karthika Suresh Namboothiri
Oct 10 (Reuters) - Gold prices scaled one-week highs on
Thursday, holding ground above $1,500 an ounce, as investors
flocked to the safety of bullion following contradictory reports
about U.S.-China trade talks.
Spot gold XAU= gained 0.1% to $1,506.78 per ounce as of
0724 GMT, having notched a peak of $1,516.77 early in the
session, its highest since Oct. 3. U.S. gold futures GCcv1
dropped 0.1% to $1,511.80.
"Gold is holding strong above $1,500 because of healthy
inflows by ETFs (exchange-traded funds). If the U.S.-China trade
talks fail once again, gold prices could rally," said Jigar
Trivedi, a commodities analyst at Mumbai-based Anand Rathi
Shares & Stock Brokers.
"Prices are not falling, because of strong investment demand
and fundamental factors. $1,490 is the current support, and if
prices drop below this, there could be an extended fall till
$1,460."
A report from the New York Times said Washington would soon
issue licences permitting some U.S. firms to supply
non-sensitive goods to China's Huawei Technologies. A report by Bloomberg, saying the White House was looking at
rolling out a currency pact with China, raised hopes of a
partial deal and helped to lift risk assets.
MKTS/GLOB
The South China Morning Post had reported earlier in the
session that a Chinese delegation was planning to leave
Washington after just a day of minister-level meetings, instead
of Friday as planned, sending Asian stocks toppling. However,
risk sentiment has recovered slightly since.
Gold is often used by investors as a hedge against political
and financial uncertainty.
"Gold ETF holdings are at three-year highs and lots of
central banks are also buying, which is keeping prices
supported," said Argonaut Securities analyst Helen Lau, adding
that some volatility could be expected in the gold market.
Indicative of investor interest, holdings of the SPDR Gold
Trust GLD , the world's largest gold-backed exchange-traded
fund, have been at their highest since November 2016. GOL/ETF
Spot gold looks neutral in a range of $1,488-$1,514 per
ounce, and an escape could suggest a direction, Reuters
technical analyst Wang Tao said. Investors also sought further cues on the U.S. Federal
Reserve's trajectory on monetary easing later in the month.
"Global trade uncertainties along with subdued global growth
will remain supportive towards safe-haven assets in the current
term," Phillip Futures analyst Benjamin Lu said in a note.
Silver XAG= rose 0.1% to $17.72 per ounce, palladium
XPD= inched 0.2% higher to $1,684.91 and platinum XPT= was
little changed at $891.49 an ounce.