PRECIOUS-Gold hovers around $1,500/oz, posts best week in three years

* Gold up 4.4%, silver gains about 5% so far this week
* SPDR Gold holdings up 1.8% so far this week
* Precious metals funds reap 4th biggest weekly inflows
-BAML

(Updates prices)
By K. Sathya Narayanan
Aug 9 (Reuters) - Gold prices steadied on Friday, on course
for their best week in over three years, as dovish central
banks, escalating U.S.-China trade tensions and negative debt
yields around the globe kept prices close to $1,500 per ounce.
Spot gold XAU= was down 0.1% at $1,498.97 per ounce at
1:56 p.m. EDT (1756 GMT) after it broke through $1,500 for the
first time since April 2013 earlier this week.
U.S. gold futures GCcv1 settled 0.1% lower at $1,508.50 an
ounce.
"Gold is where it is right now because it seems to be the
perfect environment for it between central banks cutting
interest rates and negative-yielding debt," OANDA senior market
analyst Craig Erlam said.
"Gold has gone up so much and is going to reach a point
where people will start questioning whether it is overbought ...
and whether correction is on the cards."
German long-dated bond yields tumbled to record lows in
negative territory on Wednesday, while Dutch 30-year and Irish
10-year yields turned negative for the first time on Monday.
The central banks of New Zealand, Thailand and India stunned
markets with a series of interest rate cuts, pointing to
policymakers' dwindling ammunition to fight a downturn.
The U.S. Federal Reserve also cut its benchmark interest
rate for the first time since 2008 last week. "The trade spat is driving the market crazy. We don't rule
out technical corrections, but $1,500 is now the new normal
unless trade relations take a turn in a right direction," said
Jigar Trivedi, commodities analyst at Mumbai-based Anand Rathi
Shares & Stock Brokers.
Bullion has risen 4.4% so far this week - the biggest since
April 2016 - and about 17% for the year, gaining more than $100
in the past week.
On the technical front "if we can go past the pivotal
$1,520-$1560 region, it would start to a look a lot bullish ...
For it to move that far ahead we need to see more convincing
sign for something darker on the horizon," OANDA's Erlam added.
On the investment side, holdings of SPDR Gold Trust GLD ,
the world's largest gold-backed exchange-traded fund, has gained
about 1.8% this week and about 7.3% in 2019. GOL/ETF
Precious metals funds recorded their fourth-largest inflows
ever in the week to Wednesday and investment-grade funds sucked
money in, Bank of America Merrill Lynch said on Friday.
Elsewhere, silver XAG= rose 0.4% to $16.97 per ounce and
was on course for a weekly gain of nearly 5%. Platinum XPT=
was steady at $860.31, while palladium XPD= climbed 0.3% to
$1,425.73 per ounce.