PRECIOUS-Gold gains as risk appetite falters, trade optimism sours

Eileen Soreng

(Adds comments, details, updates prices)

* China's industrial production growth slows sharply in Oct

* Deterioration in Hong Kong supporting gold further - analyst

Nov 14 (Reuters) - Gold rose on Thursday, extending gains to a third session, as weak Chinese data and doubts about whether Beijing and Washington will reach a trade deal anytime soon dented demand for riskier assets.

Spot gold was up 0.4% at $1,468.10 per ounce, as of

1103 GMT, having climbed to a near one-week high of $1,470.33

earlier in the session. U.S. gold futures also rose 0.4%

at $1,468.90 per ounce. China and the United States are holding "in-depth" discussions on a first-phase trade agreement, and cancelling tariffs is an important condition to reaching a deal, the Chinese commerce ministry said. "We are seeing some risk aversion in the markets," said Craig Erlam, OANDA senior market analyst, adding: "The commentary from both sides has kind of taken away some optimism around this phase one deal." On Tuesday, U.S. President Donald Trump said a trade deal with China was "close" but offered no details and warned that he would raise tariffs "substantially" on Chinese goods without such an accord. "Gold should be in greater demand at least in the short term because the negotiations of a partial agreement in the trade dispute between the U.S and China appear to have stalled," Commerzbank analyst Daniel Briesemann said in a note. "...Trump's threat of further punitive tariffs against China also appears to be having after-effects." A Reuters poll of economists showed the U.S.-China trade war was unlikely to see a permanent truce over the coming year, and while concerns have eased over a U.S. recession, an economic rebound is also not expected any time soon. World stocks nudged down as data showed China's industrial output grew significantly slower than expected in October, while Germany only narrowly avoided a recession in the third quarter, compounding worries about the global growth fallout from the trade war. Also supporting safe-haven gold were worries about spiralling violence in Hong Kong as anti-government protesters paralysed parts of the city for a fourth day. "We may have found a base around $1,445-$1,450, however the metal is likely to remain range-bound over the near-term unless we see $1,475-$1,480 broken," MKS PAMP said in a note. Meanwhile, holdings of the world's largest gold-backed

exchange-traded fund, SPDR Gold Trust , eased slightly to

896.77 tonnes on Wednesday.

Elsewhere, palladium climbed 1.1% to $1,728.10 perounce. Silver rose 0.6% to $17.06 per ounce, whileplatinum was 0.3% higher at $876.02 per ounce.

(Reporting by Eileen Soreng in Bengaluru Editing by Mark Heinrich)