March 25 (Reuters) – Gold prices firmed on Monday as concerns about a potential U.S. recession and decelerating global growth weighed on stock markets, which increased appetite for safer assets. FUNDAMENTALS: * Spot gold was up 0.1 percent at $1,314.21 per ounce as of 0128 GMT. * The metal last week posted its third consecutive weekly gain and rose 1 percent, the most since the week ending Feb. 1. * U.S. gold futures were up 0.2 percent at $1,314.40 an ounce. * Investors dumped shares on Monday and fled to the safety of bonds, while the Japanese yen hovered near a six-week high as risk assets fell out of favour on growing worries about an impending U.S. recession, sending global yields plunging.* U.S. markets received a clear warning of coming recession on Friday when the spread between yields on three-month Treasury bills and 10-year notes fell below zero for the first time since 2007 after U.S. manufacturing data missed estimates.

* U.S. manufacturing activity unexpectedly cooled in March, a troubling sign for the economy although the housing market showed signs lower interest rates were giving it a boost.

* Businesses across the euro zone performed much worse than expected this month as factory activity contracted at the fastest pace in nearly six years, hurt by a big drop in demand, a survey showed on Friday.

* British Prime Minister Theresa May held crisis talks with senior colleagues and hardline Brexiteers on Sunday trying to breathe life into her twice-defeated European divorce deal after reports her cabinet was plotting to topple her.

* U.S. President Donald Trump said trade negotiations with China were progressing and a final agreement “will probably happen,” adding that his call for tariffs to remain on Chinese imported goods for some time did not mean talks were in trouble.

* Hedge funds and money managers increased their bullish wagers in COMEX gold by 15,971 contracts to 57,746 in the week to March 19, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

* Demand for physical gold moderated this week in India as many jewellers held off on purchases ahead of the end of the country’s financial year to pay off advance taxes, while premiums in Singapore rose slightly on tight supplies.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.4 percent on Friday.