PRECIOUS-Gold falls 1% as risk appetite firms on recovery optimism

* Spot gold hits lowest level in nearly two weeks
* S&P 500 tops 3,000 mark
* For an interactive graphic tracking the global coronavirus
spread, open https://tmsnrt.rs/3aIRuz7 in an external browser

(Updates prices)
By Eileen Soreng
May 26 (Reuters) - Gold fell over 1% on Tuesday as major
economies further eased coronavirus-linked restrictions,
fuelling hopes for economic recovery and bolstering risk
appetite.
Spot gold XAU= slipped 1.1% to $1,710.95 per ounce by 1:41
p.m. EDT (1741 GMT), having earlier hit a low since May 13 at
$1,708.47.
U.S. gold futures GCv1 settled down 1.7% at $1,705.60.
"There is a risk-on tone in the market, driving the reversal
of (gold's) safe-haven flows," said Daniel Ghali, commodity
strategist at TD Securities.
U.S. stocks surged as investors grew optimistic about
business restarts and a potential coronavirus vaccine. .N
Spain urged foreign tourists to return from July, while
Britain will reopen thousands of shopping centres next month.
U.S. states were also gradually easing restrictions.
"A breakdown below $1,700 could crack open the doors towards
$1,680 (for gold)," said FXTM analyst Lukman Otunuga.
"Nevertheless, the downside is likely to be cushioned by
trade woes, disappointing economic data and growth fears."
White House economic adviser Larry Kudlow said President
Donald Trump is so "miffed" with Beijing over the novel
coronavirus and other matters that the trade deal is not as
important to him as it once was. Gold, a safe store of value during political and financial
uncertainty, climbed to its highest since October 2012 last
week, driven by monetary and fiscal stimulus, recession fears
and U.S.-China tensions.
"Investment demand will continue to strengthen as the U.S.
Federal Reserve's stimulus will remain in place for quite a
substantive amount of time," TD Securities' Ghali added.
Elsewhere, palladium XPD= dropped 1.3% to $1,966.43 per
ounce, platinum XAG= fell 1.2% to $828.45, while silver XAG=
dipped 0.5% to $17.12.
Mining output in South Africa, the world's biggest producer
of platinum and a leading producer of gold, could fall by 8%-10%
this year due to the pandemic, according to Roger Baxter, CEO of
industry body the Minerals Council.