PRECIOUS-Gold inches up as anxious investors await Sino-U.S. talks

* Gold hits $1,516.77/oz, highest since Oct 3
* Spot gold neutral in $1,488-$1,514/oz range -technicals

(Updates prices)
By Eileen Soreng
Oct 10 (Reuters) - Gold edged tentatively higher on Thursday
ahead of U.S.-China trade talks set to begin in Washington later
in the day, amid mixed signals over the prospects for the
negotiations.
Spot gold XAU= was up 0.1% at $1,506.96 per ounce, as of
1204 GMT, having hit a one-week peak of $1,516.77 early in the
session. U.S. gold futures GCcv1 were down 0.1% at $1,512.10.
"The market is extremely nervous. Everybody is really
positive towards the price of gold, but everybody is waiting for
some sort of assurance or confirmation on the trade talks," said
Afshin Nabavi, senior vice president at precious metals trader
MKS SA.
Markets have been on edge for weeks over the U.S.-China
trade tensions and recent data has pointed to further weakening
in global growth.
The South China Morning Post newspaper reported the Chinese
delegation was planning to leave Washington after just a day of
minister-level meetings, a day earlier than
expected.
However reports suggesting a possible reprieve on U.S.
restrictions on Chinese technology giant Huawei helped
sentiment. If negotiations break down again, by Dec. 15 nearly all
Chinese goods imports into the United States -- more than $500
billion -- could be subject to punitive tariffs. "Investors are gravitating to risk aversion until there can
be sustained clarity when it comes to U.S.-China trade
tensions... Hence we are seeing elevated prices for gold," said
Han Tan, market analyst at FXTM.
"If there is significantly positive development, then gold
could easily break below $1,500."
Gold prices have risen about 20% since hitting this year's
low of $1,265.85 in May mainly on the back of trade tensions and
gloomy economic growth outlook.
Gold is often used by investors as a hedge against political
and financial uncertainty.
Meanwhile, the dollar weakened broadly against its rivals as
it was on track for its biggest daily drop in five weeks,
further supporting the greenback-denominated gold, while
European shares inched down in early trade. USD/ Spot gold looks neutral in a range of $1,488-$1,514 per
ounce, Reuters technical analyst Wang Tao said. Among other precious metals, silver XAG= rose 0.3% to
$17.74 per ounce.
Palladium XPD= was up 0.4% at $1,688.55, while platinum
XPT= eased 0.3% to $889.12 an ounce.