* U.S.-China trade talks set for Oct. 10-11 in Washington
* Signals for gold remain mixed- technicals
(Adds comment, updates prices)
By Karthika Suresh Namboothiri
Oct 9 (Reuters) - Gold prices on Wednesday held on to the
previous session's gains, as fading hopes for progress in
U.S.-China trade talks hit risk appetite, while markets also
awaited clues on monetary easing by the U.S. Federal Reserve.
Spot gold XAU= rose 0.4% to $1,510.50 per ounce as of 0723
GMT, and stood its ground above $1,500 after jumping as much as
1% in the previous session. U.S. gold futures GCcv1 gained
0.8% to $1,516.20 per ounce.
"The market is holding back, and looking at what's going to
happen in the U.S.-China trade talks on Thursday... If the trade
dispute turns worse, we are going to expect some strong risk-off
trade," said Phillip Futures analyst Benjamin Lu.
"The players who were short, rolled back on their positions.
We are also seeing some weakness on the equity side."
The United States on Tuesday imposed visa restrictions on
Chinese officials for the detention or abuse of Muslim
minorities, angering Beijing ahead of high-level trade talks on
Thursday and Friday, and sending Asian stocks lower.
The dollar was a shade lower against a basket of major
currencies .DXY . MKTS/GLOB USD/
U.S. President Donald Trump has said tariffs on Chinese
imports will rise on Oct. 15 if no progress is made in the
negotiations.
The U.S. Treasury yield curve steepened in Asia after
Federal Reserve Chair Jerome Powell signalled further interest
rate cuts and the resumption of bond purchases to address a
recent spike in money market rates. Lower interest rates generally reduce the opportunity cost
of holding non-yielding gold and weigh on the dollar.
"With the latest QE-lite measures, we expect inflow of funds
into gold-backed ETFs to continue, which is likely to push gold
prices higher. We maintain that gold prices may test as high as
$1,600/oz in this period of uncertainty," OCBC Bank said in a
research note.
Signals are mixed for spot gold, as it failed to break a
support at $1,488 per ounce, said Reuters market analyst, Wang
Tao.
"The psychological $1,500 pivot looms as the first key
support for gold, however expect to see interest extend as far
as $1,485," MKS PAMP said in a note.
Meanwhile, silver XAG= gained 1.2% to $17.91 an ounce,
while platinum XPT= rose 0.4% to $892.99. Palladium XPD=
declined 0.2% to $1,673.17 an ounce.