PRECIOUS-Gold firms as escalating U.S.-China tensions bolster demand

Reuters

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    * U.S.-China tensions over Hong Kong unnerve stock markets
    * Palladium on track for biggest weekly gain since March
    * Physical gold demand ticks up in Asian hubs
    * For an interactive graphic tracking the global coronavirus
spread, open https://tmsnrt.rs/3aIRuz7 in an external browser

 (Updates prices)
    By Eileen Soreng
    May 22 (Reuters) - Gold gained on Friday as intensifying
U.S.-China tensions compounded fears of a slow recovery in a
global economy already reeling from the coronavirus pandemic.
    Spot gold  XAU=  rose 0.6% to $1,735.08 per ounce by 1:43
p.m. EDT (1743 GMT), after falling 1.4% on Thursday, and was
headed for a small weekly decline. U.S. gold futures  GCv1 
settled up 0.8% at $1,735.50.
    "China's aggressive stance on Hong Kong security could
exacerbate already tense relations (with the United States) and
a possible confrontation between U.S. warships and Iranian
freighters headed for Venezuela are key concerns heading into
the long weekend, prompting investor buying," said Tai Wong,
head of base and precious metals derivatives trading at BMO.
 urn:newsml:reuters.com:*:nL1N2D22ES
    U.S.-China friction came to the fore again over the source
of the coronavirus and escalated further with China's proposal
to impose security laws on Hong Kong, drawing flak from
Washington.  urn:newsml:reuters.com:*:nL4N2D32O6  urn:newsml:reuters.com:*:nL4N2D40JE  urn:newsml:reuters.com:*:nL1N2D40RY
    The tensions compounded fears of a slower global economic
recovery, pressuring equity markets but supporting the U.S.
dollar, also considered a safe haven.  MKTS/GLOB   O/R   USD/ 
    "Rising trade tensions in the past initially resulted in the
USD benefiting primarily from safe haven flows, but escalating
tensions on a global basis boosted a flight to safety in both
gold and the USD," said Standard Chartered Bank analyst Suki
Cooper.
    "The wider economic and health uncertainty are likely to
keep gold prices underpinned. ... Prices are facing technical
resistance around $1,765."
    Heightening economic woes, Beijing dropped its annual growth
target for the first time.  urn:newsml:reuters.com:*:nL4N2D40KJ
    Gold, considered an insurance during political uncertainty,
scaled an over 7-1/2 year peak earlier this week.
    On the physical side, demand picked up in top Asian hubs as
economies eased lockdowns.  GOL/AS 
    Elsewhere, palladium  XPD=  fell 3.3% to $1,947.17 per
ounce, but was on track for its strongest week since March.
    Platinum  XPT=  was steady at $832.65 per ounce and silver
 XAG=  was 0.6% higher at $17.16.

 (Reporting by Eileen Soreng in Bengaluru; Editing by Richard
Chang and Tom Brown)
 ((eileen.soreng@thomsonreuters.com; Within U.S. +1 646 223
8780, Outside U.S. +91 80 6749 6131; Reuters Messaging:
eileen.soreng.thomsonreuters.com@reuters.net))

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