* 10-yr Treasury yields drop under 2-yr yield first time in12 yrs
* SPDR Gold holdings jumped 0.9% on Wednesday
* U.S. retail sales data expected at 1230 GMT(Recasts, adds comment, details and updates prices)
By Brijesh Patel
Aug 15 (Reuters) - Gold prices edged lower on Thursday asinvestors locked in profits, after the bullion gained nearly 1%in the previous session on safe-haven buying amid concerns thatan historic drop in long-term U.S. bond yields could portend aglobal recession.
Spot gold was down 0.2% at $1,512.45 per ounce, as of0732 GMT. U.S. gold futures slipped 0.3% to $1,523.
"We are seeing flight to safety, market confidence is a bitshaky. We have been seeing that the economy is showing signs ofweakness and it is starting to slow in the second half of thisyear, which is supportive for gold," said Benjamin Lu, analyst,Phillip Futures.
"On the flip side, gold's bull run is going on for sometime,we are afraid in the short-term there might be some pullback,corrections and people locking in profits, which might createvolatility in coming days."
The U.S. yield curve was inverted for a second straighttrading session on Thursday. The yield curve inversion, whichhas historically signalled a looming recession, triggered anextensive flight to safety.
Fears of a global recession gripped financial markets aroundthe world as stocks slumped to more than two-month lows onThursday, tracking a Wall Street slide.
"We have continued safe-haven buying with stock marketslooking pretty wobbly ahead of U.S. retail sales data," OANDAanalyst Jeffrey Halley said.
"The U.S. is the last man standing among Europe and China.We could see an outsized reaction overnight if data comes inugly, which should help gold again."
Economic data from China and Germany suggested a falteringglobal economy, hit by the worsening U.S.-China trade war,Brexit and geopolitical tensions.
Gold, which pays no interest of its own, is often used as ahedge against political and financial risks.
Markets are anticipating U.S. retail sales data due later inthe day, which could serve as an indicator of the strength ofthe world's largest economy.
On the trade front, senior U.S. officials said on Wednesdaythat China has made no trade concessions after the United Statesdelayed tariffs on some Chinese imports, the latest sign thatthe trade saga is going nowhere.
Investors are focused on the Federal Reserve's annualsymposium next week. Traders see a 66.3% chance of a 25basis-point rate cut by the Fed this September.
Lower U.S. interest rates put pressure on the dollar andbond yields, increasing the appeal of non-yielding bullion.
Holdings of SPDR Gold Trust, the world's largestgold-backed exchange-traded fund, rose 0.9% to 844.29 tonnes onWednesday.
Among other precious metals, silver dipped 0.4% to$17.15 per ounce.
Platinum gained 0.1% to $841.50 an ounce andpalladium climbed 0.6% to $1,432.64.(Reporting by Brijesh Patel and Harshith Aranya in Bengaluru;Editing by Bernard Orr, Uttaresh.V and Sherry Jacob-Phillips)