PRECIOUS-Gold breaks above $1,500 on growth fears, stock market highs

Steve Orlofsky and Alexander Smith)

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* Gold hits seven weeks high; Silver gains 2%

* Trump and Xi to sign first phase of trade deal

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

Dec 24 (Reuters) - Gold rose above $1,500 an ounce on Tuesday as lingering fears of recession and equity market highs drove investor demand.

per ounce by 01:40 p.m. ET (1840 GMT), its highest since Nov. 5,

"We are still not seeing good (U.S.) numbers come out of the business investment side. We are wholly dependent on consumer spending. But when consumer spending starts to flag a bit, then the economy could really start to slow down more noticeably," Edward Meir, analyst at ED&F Man Capital Markets, said. New orders for key U.S.-made capital goods barely rose in November and shipments fell, data on Monday showed, suggesting business investment will probably remain a drag on economic growth in the fourth quarter. Data from the United States is keenly watched for cues on the central bank's future monetary trajectory. Gold is sensitive to rising interest rates, which lift its opportunity cost. Meanwhile, optimism on U.S.-China trade talks has lifted equities to record levels. World stocks remained on track for their best year in a decade, while Wall Street dipped from near-record levels. "The stock market is getting very overbought. If you have a correction in stocks, gold could benefit," Meir added. U.S. President Donald Trump said on Tuesday he and Chinese President Xi Jinping will have a ceremony to sign the first phase of a trade deal agreed this month. The 17-month long dispute has driven a 16% rise in gold prices, with putting it on track for its best year since 2010.

rose nearly 2% to $17.76 an ounce, setting it for a fifth straight session of gains.

(Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing