* ECB announcement expected at 1145 GMT
* Investors also await U.S. Aug CPI at 1230 GMT
* Palladium set for 4th session of gains (Adds comments, updates prices)
By Karthika Suresh Namboothiri
Sept 12 (Reuters) - Gold erased earlier losses on Thursday as investors covered short positions ahead of a European Central Bank meeting, but improved risk appetite on hopes of a thaw in U.S.-China trade tensions limited the bullion's advance.
Spot gold gained 0.4% to $1,503.00 per ounce at 0807 GMT. U.S. gold futures rose 0.5% to $1,510.80 .
"Investors are now waiting for the ECB meeting, and U.S. CPI data is expected to come negative... We may see some upside in gold," said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade, adding that there was some short covering in the market.
"So long as it is trading above $1,490, I do not consider it bearish."
Consumer price index (CPI) from the United States for August is expected to accelerate by merely 0.1%, compared to 0.3% in July, according to a Reuters poll, amid expectations the Federal Reserve will cut interest rates at its meeting next week.
Also expected to hint at monetary policy easing was the ECB, closely watched for measures the bank was willing to take to support a dampened economy in the depth of Brexit concerns.
The ECB is set to announce its rate decision at 1145 GMT on Thursday, followed by ECB President Mario Draghi's news conference at 1230 GMT.
Meanwhile, the United States on Wednesday agreed to delay increasing tariffs on $250 billion worth of Chinese imports to Oct. 15 from Oct. 1 "as a gesture of good will".
Hopes of a breakthrough in negotiations between the world's two biggest economies lifted risk sentiment in early trade, with MSCI's broadest index of Asia-Pacific shares outside Japan jumping to a six-week high.
Gold prices have dropped about 4% from a more than six-year high of $1,557 it hit on Sept. 4 as renewed risk appetite and improved global economic data dampened demand for the safe-haven metal. Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion.
Signals are mixed for spot gold, as it is stuck in a neutral range of $1,480-$1,497 per ounce, said Reuters technical analyst Wang Tao.
Among other precious metals, silver inched 0.6% higher to $18.19 per ounce, while platinum rose 0.7% to $950.60. Meanwhile, palladium gained 1.4% to $1,593.31 an ounce.
Palladium was on track for a fourth straight session of gains, and hit a two-month peak of $1594.61 an ounce. (Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Rashmi Aich and Uttaresh.V)