* U.S. Treasury yield curve inverts for first time since 2007
* China July industrial output growth weakest in 17 years
* German economy contracts in the second quarter
* Traders see 76% chance of 25 bps rate cut by Fed in September (Recasts, adds comments, updates prices)
By K. Sathya Narayanan
Aug 14 (Reuters) - Gold prices rose 1% on Wednesday, after falling as much as 2% in the previous session, as an inversion in U.S. Treasury yields and a slew of weak economic data from China and Germany raised fears of a global recession.
The U.S. Treasury yield curve inverted for the first time since 2007, a sign that the world's biggest economy could be heading for a recession. US/
Spot gold XAU= was up 0.9% at $1,514.33 per ounce, by 1215 GMT, after rising about 1% earlier. U.S. gold futures GCcv1 were up 0.8% at $1,525.70.
"We got some poor Chinese data out, we're seeing some slowing there, and the German data showing that the economy contracted in the second quarter so, all these slowdown concerns support gold," ING analyst Warren Patterson said.
Europe's biggest economy reversed in the second quarter as the U.S.-China trade war and weak demand dragged on German manufacturers, data showed, while the euro zone as a whole barely grew in the same quarter. the growth in China's industrial output in July rose at the slowest pace in more than 17 years. yield curve inversion and the data tampered a rally for equities that had been driven by more positive news on the trade front. MKTS/GLOB
Bullion fell as much as 2% from more than six-year highs of $1,534.31 on Tuesday after Washington decided to delay 10% tariffs on certain Chinese products. a technical viewpoint, "the area of $1,530 has temporarily arrested the gold rally, proving to be a first resistance level in the way of bullion," ActivTrades Chief Analyst Carlo Alberto De Casa said in a note.
Investors now await the Federal Reserve's annual symposium next week for clues on the future trajectory of interest rates. Traders see a 76% chance of a 25 basis-point rate cut by the U.S. central bank next month. FEDWATCH
"The bullish drivers (for gold) have not gone away but the question being asked now is whether we have reached a time where consolidation might be in order," Saxo Bank analyst Ole Hansen said.
"Gold's biggest short-term challenge is its ability to continue to satisfy a very crowded long position."
Elsewhere, silver XAG= gained 1.2% to $17.16 per ounce, after hitting its highest since January 2018 in previous session.
"If gold prices go much higher, investors may potentially look out for silver as on a historical basis, silver is under-priced relative to gold," ING's Patterson said adding that current price action showed that "investors are seeing silver as an appealing asset."
Platinum XPT= was steady at $852.16 an ounce, while palladium XPD= fell 1.2% to $1,437.65.