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· Gold prices edged lower on Friday but were headed for a third consecutive weekly gain, as fears over a global economic slowdown and a lack of clarity on the U.S.-China trade war boosted the metal’s safe-haven appeal.

Spot gold was down 0.1% at $1,521 per ounce as of 0400 GMT, but is up nearly 1.6% so far this week after rising in the previous two weeks.

U.S. gold futures were steady at $1,5231 an ounce.

· “Gold is consolidating here. The important consideration is that none of the headwinds have gone away; the tariffs got delayed a bit, but the underlying trade war remains and lower yields are supportive for gold,” said Ilya Spivak, senior currency strategist with DailyFx.

“Markets are looking ahead for the Jackson Hole symposium. In context of recent gains that might give us some corrective pullbacks, as people reduce exposure before event risk.”

· U.S. President Donald Trump said on Thursday he believed China wanted to make a trade deal and that the dispute would be fairly short.

This comes after Beijing vowed to counter the latest tariffs on $300 billion of Chinese goods but called on the United States to meet it halfway on a potential trade deal.

With the trade saga going nowhere, investors have hedged against a global slowdown by buying safe-haven assets like gold, Japanese yen and U.S. Treasuries.

· Earlier this week, 10-year Treasury yields dropped below the 2-year yield for the first time in 12 years. Curve inversion is widely considered a warning that the economy is headed for recession.

· Bullion has risen nearly 8%, or more than $100, since the beginning of the month amid the heightened trade tensions and a slew of disappointing economic data globally.

· “The yellow metal continues to benefit from safe-haven inflows, which should ensure that any pullbacks are limited ahead of the weekend,” OANDA analyst Jeffrey Halley, said in a note.

Investors will shift their focus to the Federal Reserve’s annual symposium next week. Traders see about a one-in-three chance of a 50 basis-point rate cut by the Fed this September.

· Meanwhile, the dollar index edged higher on Friday and was on course for a weekly gain.

· On the technical side, spot gold may fall into a range of $1,483-$1,503 per ounce, as suggested by its wave pattern and a retracement analysis, said Reuters technical analyst Wang Tao.

· Gold technical analysis: The 38.2% ahead of a full retracement is on the cards on Dollar strength

Gold prices were grinding their ways higher on Thursday but they are yet to break the 1528/30s. Bulls need to get over there in order to continue higher. On a breakout, bulls will look to the 127.2% Fibo target which is located around 1,560, guarding the Oct 2012 highs at 1795.

However, on the downside, 1520is now key and will come under pressure on continued Dollar strength. A break there opens 1509 where price will meet the 38.2% ahead of a full retracement back below the1500 handle to the 1480s.

· Daily FX: GOLD TECHNICAL ANALYSIS

Gold prices are inching toward resistance at 1540.70, the 76.4% Fibonacci expansion. A daily close above that exposes a weekly chart inflection level at 1563.00 next. Negative RSI divergence hints upside momentum is ebbing however. A turn below the 61.8% Fib at 1513.94 targets the 50% level at 1492.31.

· Gold risks downside amid bearish technical set up, risk-on

Gold prices look vulnerable to further downside risks in Europe, as sellers aim for 100-HMA near $1510 on an hourly rising wedge breakdown. Fundamentally, an improvement in the risk tone is likely to weigh on the safe-haven.

· Elsewhere, silver was down 0.2% at $17.22 per ounce but was on track for a second consecutive weekly gain.

Platinum fell 0.3% to $836.10 an ounce, while palladium rose 0.3% to $1,448.57 an ounce.

Reference: Reuters, FX Street, Kitco