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PRECIOUS-Gold holds steady as trade talk hopes offset slowdown fears

Eileen Soreng

* SPDR Gold Trust holdings at highest since November 2016

* Silver hits a peak since Sept. 6 at $18.74/oz (Adds, quote, detail, updates prices)

Sept 24 (Reuters) - Gold prices were steady on Tuesday, near a two-week peak touched in the previous session on global slowdown fears and tensions in the Middle East, while an improved Sino-U.S. trade tone weighed on prices.

Spot gold was little changed at $1,521.62 per ounce at 0734 GMT, after climbing to its highest since Sept. 6 at $1,526.80 in the previous session.

U.S. gold futures were down 0.3% to $1,527.10 per ounce

"Both the countries (China and the United States) have given some indication again that an agreement might be reached and that is affecting gold a bit in a negative way but mostly it is trading in sidelines," said Michael McCarthy, chief market strategist at CMC Markets. "If the talks fall apart again, it will support gold."

U.S. Treasury Secretary Steven Mnuchin told the Fox Business Network that discussions with China were scheduled in two weeks, propping up the dollar and global shares.

The tariff dispute between the world's two largest economies has dragged on for well over a year, rattling investors and denting global growth, and driving the safe-haven metal up about 18% so far this year.

Concerns mounted over a slowing global economy after a survey out of the Euro zone on Monday showed business growth stalled this month, dragged down by shrinking activity in powerhouse Germany, where a manufacturing recession deepened unexpectedly.

"Geopolitical uncertainties and recessionary fears from euro zone with Brexit deadline approaching, overall sentiments will be positive for gold and silver," said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.

Meanwhile, tensions in the Middle East have escalated since an attack on Saudi Arabia's oil facilities earlier this month, with Britain, Germany and France backing the United States and blaming Iran for the attacks.

Investors also kept an eye out for a UK Supreme Court ruling related to the suspension of Britain's parliament this month which may further complicate Prime Minister Boris Johnson's plans to lead his country out of the European Union next month.

Indicative of sentiment, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 1.61% to 908.52 tonnes on Monday, the highest since November 2016.

Elsewhere, spot palladium was down 0.1% at $1,651.79 per ounce, after it climbed to a record $1,664.50 on Monday.

Silver was 0.5% lower at $18.53 per ounce, having hit a high since Sept. 6 at $18.74. Platinum fell 0.4% to $952.80. (Reporting by Eileen Soreng and Diptendu Lahiri in Bengaluru; editing by Subhranshu Sahu and Jason Neely)