* Gold up 1.6% so far this week
* Speculation grows of aggressive central bank easing
* Silver set for second week of gains
By Harshith Aranya
Aug 16 (Reuters) - Gold prices edged lower on Friday butwere headed for a third consecutive weekly gain, as fears over aglobal economic slowdown and a lack of clarity on the U.S.-Chinatrade war boosted the metal's safe-haven appeal.
Spot gold XAU= was down 0.1% at $1,521 per ounce as of0400 GMT, but is up nearly 1.6% so far this week after rising inthe previous two weeks.
U.S. gold futures GCcv1 were steady at $1,5231 an ounce.
"Gold is consolidating here. The important consideration isthat none of the headwinds have gone away; the tariffs gotdelayed a bit, but the underlying trade war remains and loweryields are supportive for gold," said Ilya Spivak, seniorcurrency strategist with DailyFx.
"Markets are looking ahead for the Jackson Hole symposium.In context of recent gains that might give us some correctivepullbacks, as people reduce exposure before event risk."
U.S. President Donald Trump said on Thursday he believedChina wanted to make a trade deal and that the dispute would befairly short. urn:newsml:reuters.com:*:nL2N25B1TK
This comes after Beijing vowed to counter the latest tariffson $300 billion of Chinese goods but called on the United Statesto meet it halfway on a potential trade deal. urn:newsml:reuters.com:*:nL4N25B2NR
With the trade saga going nowhere, investors have hedgedagainst 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 the2-year yield for the first time in 12 years. Curve inversion iswidely considered a warning that the economy is headed forrecession. US/
Bullion has risen nearly 8%, or more than $100, since thebeginning of the month amid the heightened trade tensions and aslew of disappointing economic data globally.
"The yellow metal continues to benefit from safe-haveninflows, which should ensure that any pullbacks are limitedahead of the weekend," OANDA analyst Jeffrey Halley, said in anote.
Investors will shift their focus to the Federal Reserve'sannual symposium next week. Traders see about a one-in-threechance of a 50 basis-point rate cut by the Fed this September. FEDWATCH
Meanwhile, the dollar index .DXY edged higher on Fridayand was on course for a weekly gain. USD/
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 aretracement analysis, said Reuters technical analyst Wang Tao. urn:newsml:reuters.com:*:nL4N25A0JF
Elsewhere, silver XAG= was down 0.2% at $17.22 per ouncebut was on track for a second consecutive weekly gain.
Platinum XPT= fell 0.3% to $836.10 an ounce, whilepalladium XPD= rose 0.3% to $1,448.57 an ounce. (Reporting by Harshith Aranya and Brijesh Patel in Bengaluru;editing by Richard Pullin) ((firstname.lastname@example.org; Within U.S. +1 646 2238780, Outside U.S. +91 80 6749 6462; Reuters Messaging:email@example.com))