By Karthika Suresh Namboothiri and Asha Sistla
(Reuters) - Gold rose more than 1% on Tuesday as fears of a possible recession gripped investors following disappointing U.S. economic data and an ongoing U.S.-China trade dispute, while silver breached $18 for the first time in nearly two years.
Spot gold <XAU=> was up 1% at $1,540.57 per ounce at 1:41 p.m. EDT (1741 GMT), close to a high of $1,554.56 it hit on Monday, a level last reached in April 2013.
U.S. gold futures for December <GCcv1> settled up 1% at $1,551.80.
U.S. consumer confidence <USCONC=ECI> inched down in August and growth in home prices hit its slowest pace in nearly seven years.
"A lot of people are worried about the one economy that is doing well now, the U.S. economy, and with these numbers for the consumer confidence, that puts it into question a little bit," said Chris Gaffney, president of world markets at TIAA Bank.
"The inverted yield curve is certainly a recessionary signal. That adds flows into gold as a safe haven."
The U.S. yield curve went deeper into inversion midday Tuesday as Wall Street's earlier gains faded on renewed concerns about a U.S. recession and ongoing trade tensions.
Comments by U.S. President Donald Trump that China had offered to resume trade talks assuaged some concerns in the wider financial markets, though uncertainty prevailed as Beijing declined to confirm the assertion.
"We continue to have concerns about the global economy," said Bart Melek, head of commodity strategies at TD Securities in Toronto. "The U.S. President's deal with China is pending and that may be the rhetoric from the White House as opposed to an actual fact pointing to negotiation."
The trade war between the world's two largest economies has roiled markets since it began more than a year ago, triggering fears of a global economic slowdown. This helps gold, often considered a safer place to park assets during times of global uncertainty.
Meanwhile, markets priced in a quarter-point cut in interest rates by the U.S. Federal Reserve next month, and over 100 basis points of easing by the end of next year. <FEDWATCH> Lower U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.
Also helping the precious metals complex was a weaker dollar. <.DXY>
Spot silver extended gains for a third straight session, jumping 3% to $18.15 per ounce. The metal earlier hit $18.20, its highest level since September 2017.
"Silver had underperformed and now it is catching up with gold. We see silver as a catastrophe insurance," added TIAA Bank's Gaffney.
Platinum climbed 1.3% to $866.04, and palladium rose 0.6% to $1,482.63.
(Reporting by Asha Sistla and Karthika Suresh Namboothiri in Bengaluru; Editing by Matthew Lewis)