* Traders await U.S. CPI data due Thursday
* Platinum hits two-week high on Thursday (Recasts, adds quotes)
By Sethuraman N R
BENGALURU, Sept 13 (Reuters) - Gold prices on Thursday held steady near a more than one-week high hit in the previous session, with hopes for a new round of U.S.-China trade talks weighing on the dollar.
Spot gold was firm at $1,205.16 an ounce at 0317 GMT, after hitting its highest since Aug. 31 at $1,208.48 on Wednesday. Bullion gained 0.7 percent in the previous session, its biggest one-day rise since Aug. 24.
U.S. gold futures were also mostly steady at $1,210.50 an ounce.
Senior U.S. officials sent an invitation to their Chinese counterparts to hold another bilateral trade meeting, raising speculation about a subtle shift in Washington’s policy.
The outreach comes as more than 85 U.S. industry groups launched a coalition on Wednesday to take a fight public against President Donald Trump’s trade tariffs.
“Signs of movement in Sino-U.S. trade talks is the proximate cause (for steady prices), with a market that is still short and probably more sensitive to news, favouring the upside for gold,” said Nicholas Frappell, global general manager at ABC Bullion, Australia.
The months-long trade rift between U.S. and China has prompted investors to buy the U.S. dollar in the belief that the United States has less to lose from the dispute. This has driven investors towards record short positions in Comex gold and heavy liquidations in gold exchange traded funds.
Extended short positions could possibly lead to a squeeze and push prices up, Frappell said.
Gold prices have fallen nearly 12 percent since a peak in April amid intensifying global trade tensions and under pressure from rising U.S. interest rates.
Higher rates make non-yielding bullion less attractive, and tend to boost the dollar, in which gold is priced.
“Gold is trading entirely on the mercy of the U.S. dollar ... to judge gold by any other metric in this environment provides an indecisive, inconclusive and highly inconsequential signal,” said Stephen Innes, Asia-Pacific trading head for OANDA.
The dollar index against a basket of six major currencies stood little changed at 94.812, near a 1-1/2-week low of 94.733 marked in the previous session.
Cross-asset traders were waiting for U.S. consumer prices index data due later on Thursday for cues on the U.S. dollar’s next move, Innes said.
The CPI data comes after soft U.S. wholesale price data undermined the case for a faster pace of policy tightening by the Fed. The U.S. central bank is widely expected to raise benchmark interest rates at its September meeting.
Among other precious metals, spot silver rose 0.2 percent to $14.23.
Platinum rose 0.3 percent at $801.10, after touching a two-week high of $802.70. Palladium was up 0.1 percent at $975.50. (Reporting by Nallur Sethuraman in Bengaluru; editing by Joseph Radford and Richard Pullin)