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· Gold prices dropped for a fourth straight session on Tuesday as risk appetite remained buoyed by hopes for global stimulus and expectations of a possible thawing in the Sino-U.S. trade war.

Spot gold was down 0.6% at $1,490.10 per ounce, as of 0650 GMT, after hitting its lowest since Aug. 13 at $1,486 earlier in the session.

Bullion prices have shed nearly 5% since hitting a more than 6-year peak of $1,557 on Sept. 4.

U.S. gold futures fell 0.8% to $1,498.50 per ounce.

· Data released earlier in the day showed China’s August consumer price index (CPI) rose above expectations, while the producer price index (PPI), a key barometer of corporate profitability, contracted less than expected, urging Beijing to step up economic stimulus as its dispute with the United States intensifies.

“Globally we are seeing a shift back towards growth assets and that’s coming at the cost of the safe-havens,” said Michael McCarthy, chief market strategist at CMC Markets.

“A lot has already been factored in about the effect of the trade war on China. Better-than-expected numbers might suggest that the impact might not be as deep as many thought.”

· The trade war between China and the United States has upset markets globally since it began more than a year ago, fanning concerns of a global economic slowdown.

However, markets took heart from their decision to hold talks in early October in Washington.

· Meanwhile, U.S. Treasury Secretary Steven Mnuchin said on Monday he did not see the threat of a recession as President Donald Trump seeks to revive trade negotiations, adding that he expected a positive year ahead for the U.S. economy.

“If prices hold at $1,490, we might see gold steadying. However, gold’s short-term trend is downward. If it breaks through $1,480, it could fall to $1,425,” McCarthy said.

· Investors now await the European Central Bank’s meeting on Thursday for clues on monetary policy easing. The ECB is all but certain to introduce a package of monetary easing and stimulus measures, but markets doubt it will opt for a massive quantitative easing.

The U.S. Federal Reserve is also widely expected to cut interest rates next week.

· “A resumption in U.S.-China trade talks along with accommodative monetary policy by global central banks has renewed risk appetite for the current term,” Phillip Futures said in a note.

· Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.82% to 882.42 tonnes on Monday.

· Gold technical analysis: Bearish bias strengthens with drop to one-month lows