May 15, 2020 / 1:59 AM / 20 days ago

PRECIOUS-Gold rises on stimulus optimism, renewed U.S.-China tensions

    May 15 (Reuters) - Gold rose on Friday to hover below a
three-week high hit in the previous session, underpinned by
talks of further U.S. stimulus and worsening U.S.-China
relations.
        
    FUNDAMENTALS
    * Spot gold        gained 0.1% to $1,730.56 per ounce by
0142 GMT, having touched a three-week high of $1,735.96 on
Thursday. U.S. gold futures        climbed 0.1% to $1,742.30. 
    * The metal has gained about 1.8% so far this week.
    * Asian stocks were set to rise amid optimism about the
re-opening of the U.S. economy from coronavirus lockdowns and
possibly more stimulus that could fuel a recovery.            
    * U.S. President Donald Trump is open to negotiations on
another possible stimulus bill amid the pandemic, but not the
one put forward by House of Representatives Democrats, a White
House spokeswoman said.             
    * Gold tends to benefit from widespread stimulus measures as
it is often seen as a hedge against inflation and currency
debasement. 
    * Trump also signalled a further deterioration of his
relationship with China over the virus, saying he has no
interest in speaking to President Xi Jinping right now and going
so far as to suggest he could even cut ties with Beijing.
            
    * Underscoring the economic impact of the epidemic, initial
claims for state unemployment benefits in the United States
totalled a seasonally adjusted 2.981 million for the week ended
May 9, but have been gradually decreasing since hitting a record
6.867 million in the week ended March 28.             
    * British manufacturers think it will take longer to recover
from the economic impact of COVID-19 than just a couple of weeks
ago, according to an industry survey.             
    * The Bank of England is not considering taking "the very
big step" of pushing interest rates below zero, Governor Andrew
Bailey said.             
    * SPDR Gold Trust       holdings, the world's largest
gold-backed exchange-traded fund, rose 1.15% to 1,104.72 tonnes
on Thursday.          
    * Palladium        gained 0.3% to $1,840.42 an ounce, but
was on track to post its seventh straight weekly loss. Platinum
       eased 0.1% to $767.29, while silver        rose 0.7% to
$15.97. 

DATA/EVENTS (GMT)
0200  China    Urban Investment                 April
0200  China    Industrial Output, Retail Sales  April
0600  Germany  GDP Flash QQ SA, YY NSA          Q1    
0900  EU       GDP Flash Estimate QQ, YY        Q1
1000  EU       Reserve Assets Total             April
1230  U.S.     Retail Sales MM                  April
1315  U.S.     Industrial Production MM         April
1400  U.S.     U Mich Sentiment Prelim          May    

 (Reporting by K. Sathya Narayanan in Bengaluru; Editing by
Subhranshu Sahu)
  
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