Gold holds steady after recovering from one-week low

(Reuters) - Gold held steady early on Tuesday after recovering from one-week lows hit the day before, with the dollar edging down and investors using the correction in prices to hunt for bargains.

FUNDAMENTALS

* Spot gold was mostly unchanged at $1,335.82 an ounce by 0104 GMT. Bullion touched its lowest since July 29 at $1,329.55 on Monday.

* U.S. gold was nearly flat at $1,341.40 an ounce.

* The dollar index, which gauges the greenback against a basket of six major currencies, slipped as much as 0.1 percent to 96.344 .

* The U.S. economy is at increasing risk of becoming trapped in a prolonged phase of slow growth that points to the need for lower interest rates than previously expected, Federal Reserve policymaker Jerome Powell was quoted as saying.

* British retail spending bounced back in July as sales promotions and good weather outweighed any immediate concern about the consequences of Britain's decision to leave the European Union, a survey showed.

* Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.67 percent to 973.81 tonnes on Monday.

* The Perth Mint's sales of gold and silver products fell in July as slower summer sales in North America kept distributors well stocked, and demand out of continental Europe remained subdued.

* The London Metal Exchange (LME) said on Tuesday it is planning to launch spot and futures contracts for gold and silver in the first half of 2017, adding to its list of products which includes copper and aluminium.

MARKET REPORT

* Asian shares stood atop one-year peaks on Tuesday as a desperate search for yield drove a record inflow into emerging market funds, while oil prices tried to sustain their latest bounce.

DATA AHEAD (GMT)

0130 China Consumer prices July 0130 China Producer prices July 0600 Germany Trade balance June 0830 Britain Industrial output June 1000 U.S. NFIB business optimism July 1230 U.S. Labor costs Q2 1400 U.S. Wholesale sales June

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Joseph Radford)