May 25, 2020 / 3:34 AM / 3 months ago

PRECIOUS-Gold falls as potential Japan stimulus boosts risk appetite

    * SPDR Gold Trust holdings rose 0.4% on Friday
    * Speculators increased gold bullish positions in week to
May 19
-CFTC
    * For an interactive graphic tracking the global coronavirus
spread, open tmsnrt.rs/3aIRuz7 in an external browser

 (Updates prices)
    By Harshith Aranya
    May 25 (Reuters) - Gold declined on Monday as Japanese
equities rose on news of a potential stimulus programme that
boosted investors' risk appetite, though fresh tensions over
Hong Kong limited the metal's fall.
    Spot gold        was down 0.5% at $1,725.18 per ounce by
0700 GMT. U.S. gold futures        fell 0.6% to $1,725.60.
    "I think the play into stocks and other risk assets has
probably supported the risk appetite, and diminished the appeal
for gold in the short term," said IG Markets analyst Kyle Rodda.
    "There still seems to be the broad issue of gold prices
trying to break too far above the $1,740, $1,750 mark."
    Gold on Friday rose as much as 0.8% to touch $1,739.51,
before paring gains.
    Japan is considering fresh stimulus worth over $929 billion,
which mostly consists of financial aid programmes for companies
hit by the coronavirus pandemic, the Nikkei newspaper said.
            
    Japan's Nikkei index         jumped 1.7% following the
report.            
    Highlighting a return of political uncertainty, thousands
rallied on Sunday to protest against Beijing's plan to impose
national security laws on Hong Kong.             
    The proposed national security legislation for Hong Kong
could lead to U.S. sanctions and threaten the city's status as a
financial hub, White House National Security Adviser Robert
O'Brien said on Sunday.             
    Gold is seen as a safe-haven asset during political and
economic uncertainties.
    Reflecting investor sentiment, SPDR Gold Trust      
holdings, the world's largest gold-backed exchange-traded fund,
rose 0.4% to 1,116.71 tonnes on Friday.          
    Speculators increased their bullish positions in COMEX gold
and silver contracts in the week to May 19, the U.S. Commodity
Futures Trading Commission said on Friday.        
    Overall trading is expected to be subdued with U.S. and UK
markets shut for public holidays.
    Palladium        rose 0.5% to $1,956.60 per ounce; while
platinum        was down 1.1% at $830.19, and silver       
dropped 1.6% to $16.91.

 (Reporting by Harshith Aranya and K. Sathya Narayanan in
Bengaluru; Editing by Vinay Dwivedi)
  
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