PRECIOUS-Gold drops for 4th session as improved risk appetite weighs

* Holdings of SPDR Gold Trust fell 0.82% on Monday

* Chinese CPI, PPI data better than expected

* Investors await ECB policy meeting on Thursday (Updates prices)

Sept 10 (Reuters) - Gold prices dropped for a fourth straight session on Tuesday as risk appetite remained buoyed by hopes for global stimulus and expectations of progress in the Sino-U.S. trade talks.

Spot gold was down 0.2% to $1,495.00 per ounce as of 0816 GMT, after hitting its lowest since Aug. 13 at $1,486 earlier in the session.

Bullion prices have shed nearly 5% since hitting a more than 6-year peak of $1,557 on Sept. 4.

U.S. gold futures fell 0.5% to $1,503.30 per ounce.

Data released earlier in the day showed China’s August consumer price index (CPI) rose above expectations, while the producer price index (PPI), a key barometer of corporate profitability, contracted less than expected, urging Beijing to step up economic stimulus as its dispute with the United States intensifies.

“Globally we are seeing a shift back towards growth assets and that’s coming at the cost of the safe-havens,” said Michael McCarthy, chief market strategist at CMC Markets.

“A lot has already been factored in about the effect of the trade war on China. Better-than-expected numbers might suggest that the impact might not be as deep as many thought.”

The trade war between China and the United States has upset markets globally since it began more than a year ago, fanning concerns of a global economic slowdown.

However, markets took heart from their decision to hold talks in early October in Washington.

Meanwhile, U.S. Treasury Secretary Steven Mnuchin said on Monday he did not see the threat of a recession as President Donald Trump seeks to revive trade negotiations, adding that he expected a positive year ahead for the U.S. economy. “If prices hold at $1,490, we might see gold steadying. However, gold’s short-term trend is downward. If it breaks through $1,480, it could fall to $1,425,” McCarthy said.

Investors now await the European Central Bank’s meeting on Thursday for clues on monetary policy easing. The ECB is all but certain to introduce a package of monetary easing and stimulus measures, but markets doubt it will opt for a massive quantitative easing.

The U.S. Federal Reserve is also widely expected to cut interest rates next week.

“A resumption in U.S.-China trade talks along with accommodative monetary policy by global central banks has renewed risk appetite for the current term,” Phillip Futures said in a note.

Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.82% to 882.42 tonnes on Monday.

Among other precious metals, platinum dropped 1% to $936.73 per ounce, while palladium fell 0.4% to $1,538.13. Silver was down 0.1% at $17.95 per ounce. (Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Subhranshu Sahu)