May 26, 2020 / 9:21 AM / 3 months ago

PRECIOUS-Gold eases as equities rally, Hong Kong woes limit losses

    * European shares near 11-week high
    * U.S. stock futures clear 3,000 level
    * U.S. consumer confidence data due at 1400 GMT
    * For an interactive graphic tracking the global coronavirus
spread, open tmsnrt.rs/3aIRuz7 in an external browser

 (Updates prices)
    By Brijesh Patel
    May 26 (Reuters) - Gold prices edged lower on Tuesday as
hopes of economic recovery lifted share markets with many
countries easing coronavirus-driven lockdowns, although
Sino-U.S. tensions over Hong Kong limited bullion's losses.
    Spot gold        slipped 0.1% to $1,727.63 per ounce by 1221
GMT. U.S. gold futures        were down 0.5% at $1,727.50.
    "We are seeing U.S. stocks breaking key levels to the
upside, so that is adding bit of selling pressure to gold which
has otherwise been supported by the recent geopolitical worries
related to Hong Kong," said Saxo Bank analyst Ole Hansen.
    "Right now, there is no key driver as such for gold and that
basically raises the risk of a correction or renewed period of
consolidation."
    European shares hovered near an 11-week high, while U.S.
stock futures rose 2% and breached a major chart barrier as
businesses worldwide gradually reopened following a months-long
lockdown.            
    However, offering some respite to gold were brewing trade
tensions between the United States and China over a new security
law to be enforced in Hong Kong.
    White House National Security Adviser Robert O'Brien warned
that the proposed legislation could lead to U.S. sanctions on
Hong Kong and China, and threaten the city's status as a
financial hub.             
    Gold is often used as a safe store of value during times of
political and financial uncertainty.
    "On the technical side, only a clear recovery of $1,750
would open space for further rallies, while a decline below
$1,725 would increase the likelihood of another test of $1,700
and potentially down to $1,671-$1,675," ActivTrades chief
analyst Carlo Alberto De Casa said in a note.
    Market participants are waiting for the U.S. consumer
confidence report due at 1400 GMT.
    Elsewhere, palladium        dropped 1.1% to $1,969.79 per
ounce and platinum        fell 0.1% to $837.68, while silver
       rose 0.9% to $17.35.

 (Reporting by Brijesh Patel in Bengaluru; Editing by Kirsten
Donovan and Emelia Sithole-Matarise)
  
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