* 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 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 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.
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 rose 0.3% to $17.74 per ounce.
Palladium was up 0.4% at $1,688.55, while platinum eased 0.3% to $889.12 an ounce. (Reporting by Eileen Soreng in Bengaluru; editing by Jason Neely and Elaine Hardcastle)