PRECIOUS-Gold edges higher as global recession fears persist

(Updates prices)
* Gold hovers below multi-year peak hit in previous session
* For an interactive graphic tracking the global coronavirus
spread, open https://tmsnrt.rs/3aIRuz7 in an external browser

By Brijesh Patel
May 19 (Reuters) - Gold prices rose on Tuesday, supported by
fears of a global recession and a wave of central bank stimulus
measures, while an uptick in risk appetite after a positive
report on a potential COVID-19 vaccine limited bullion's
advance.
Spot gold XAU= was up 0.1% at $1,733.06 an ounce by 1244
GMT. U.S. gold futures GCv1 were steady at $1,733.50.
Gold had slipped from a multi-year peak on Monday after
drugmaker Moderna MRNA.O said its COVID-19 experimental
vaccine showed promising results in a preliminary trial, lifting
U.S. equities and oil prices. MKTS/GLOB
However, price support has come in the form of massive
stimulus measures from central banks in an effort to limit the
economic damage caused by the virus. Gold tends to benefit from
such stimulus because the metal is widely viewed as a hedge
against inflation and currency debasement.
"Right now, the market is focused on the aftermath of the
big rally in stock markets yesterday ... but the underlying
demand has not gone away," said Saxo Bank analyst Ole Hansen.
"We are looking at a weaker economic outlook, massive
central bank measures and tensions on the geopolitical front,
which should keep gold prices high."
In the latest on damage control, France and Germany proposed
a 500 billion euro ($543 billion) recovery fund that would offer
grants to European Union regions and sectors hit hardest by the
virus. Federal Reserve Chairman Jerome Powell, who at the weekend
said that a U.S. economic recovery could stretch deep into next
year, is due to speak before the Senate Banking Committee on
Tuesday to discuss economic rescue efforts. Raising fears of a further deterioration in China-U.S.
relations, Nasdaq Inc NDAQ.O is set to unveil new restrictions
on initial public offerings, which will make it more difficult
for some Chinese companies to list there, sources said.
"Central bank's worrisome balance sheet expansion is
unequivocally one of gold's primary drivers. And hedging against
an escalation in U.S. trade tensions also seems like a great
idea," Stephen Innes, chief market strategist at financial
services firm AxiCorp, said in a note.
Innes pointed to interest rates near 0% and said that the
U.S.-China trade war could also be "paving the way higher with
gold bars".
Elsewhere, palladium XPD= gained 0.9% to $2,031.26 an
ounce, having jumped more than 9% at one point on Monday.
Platinum XPT= was up 0.4% at $821.28 and silver XAG=
shed 0.6% to $17.07.