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

London (May 19) - 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.

Reuters

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