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Gold gains as shares slip on growth fears

Sumita Layek

Gold prices rose overnight and stayed above the key $US1,500 per ounce psychological level as stock markets slipped on concerns about global economic growth and the US-China trade dispute, triggering safe haven bids.

Spot gold was up 0.6 per cent at $US1,505.92 per ounce, holding close to last week's more than six-year high of $US1,510.

US gold futures settled up 0.6 per cent at $US1,517.20 an ounce.

"We have a little weakness in the equity markets globally this morning so certainly we have continued safe haven bids for gold," said David Meger, director of metals trading at High Ridge Futures.

"With continued disruptions in Hong Kong during the weekend, trade tensions and global central bank easing, it's not hard to understand why gold prices remain supported," Meger added.

US stocks were dragged down by financial stocks, as investors shunned risky bets on fears that a drawn-out US-China trade conflict could force the global economy into recession.

US President Donald Trump said on Friday he was not ready to make a deal with Chinese authorities and called the planned September round of trade talks into question.

Trump had earlier pledged to tax an additional $US300 billion worth of Chinese imports from September 1.

Gold prices rose as much as 4.0 per cent last week and are up about 17 per cent this year.

"Anything is possible (with gold prices), if the trade negotiations deteriorate further prices can go even higher," said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York.

Analysts said negative debt yields around the globe were further supporting bullion.

Non-interest-bearing gold tends to benefit when yields on other assets are low.

Investors are focused on the Federal Reserve's annual symposium in Jackson Hole, Wyoming, next week, with investors seeking greater clarity on the path of interest rates.

Traders see a 74 per cent chance of a 25 basis-point rate cut by the US central bank this September.

Hedge funds and money managers raised their bullish stance in COMEX gold in the week to August 6, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Silver was up 0.8 per cent at $US17.07 per ounce.

Platinum was flat at $US858.88 per ounce while palladium gained 0.9 per cent to $US1,433.69 an ounce.