May 19, 2020 / 1:25 AM / 10 days ago

PRECIOUS-Gold rises slightly on U.S.-China tensions, gloomy economic outlook

    May 19 (Reuters) - Gold prices inched up on Tuesday,
supported by strained Sino-U.S. relations and a dismal global
economic outlook, although positive news from an early-stage
trial for a coronavirus vaccine spurred some risk appetite and
capped the metal's gains.
        
    FUNDAMENTALS
    * Spot gold        was up 0.2% at $1,735.04 per ounce by
0042 GMT. U.S. gold futures        gained 0.2% to $1,737.10.
    * On Monday, the metal fell back from a more than seven-year
high to settle 0.5% lower, as stocks and oil surged after
drugmaker Moderna          said its experimental vaccine showed
promising results in an early-stage trial.             
            
    * Highlighting Sino-U.S. friction, stock exchange Nasdaq Inc
         is set to unveil new restrictions on initial public
offerings, which will make it more difficult for some Chinese
companies to debut on it, sources said.             
    * U.S. lawmakers and officials are crafting proposals to
push American companies to move operations or key suppliers out
of China that include tax breaks, new rules, and carefully
structured subsidies.             
    * Money markets ramped up expectations that the United
Kingdom could cut interest rates below zero for the first time.
            
    * The global economy will take much longer to recover fully
from the shock caused by the new coronavirus than initially
expected, the head of the International Monetary Fund
said.               
    * Gold has risen about 14% this year as central banks rolled
out a wave of rate cuts and other stimulus to limit the economic
damage from the pandemic. Lower interest rates reduce the
opportunity cost of holding non-yielding bullion.             
    * Epicentres of the coronavirus outbreak including New York,
Italy and Spain are gradually lifting restrictions that have
kept millions inside.             
    * Palladium        slipped 0.9% to $1,995.76 per ounce,
platinum        fell 0.5% to $814.01, and silver        fell
0.5% to $17.09.

DATA/EVENTS (GMT)
0600   UK        ILO Unemployment Rate     March
0600   UK        Employment Change         March
0900   Germany   ZEW Economic Sentiment    May
1230   US        Building Permits: Number  April

 (Reporting by Harshith Aranya in Bengaluru; Editing by
Subhranshu Sahu)
  
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