PRECIOUS-Gold drops as signs of lockdown easing lift risk appetite

(Updates prices)
* U.S. states with fewer cases ease restrictions
* Worldwide coronavirus cases more than 3 million
* Lockdown endings prop up stocks market
* For an interactive graphic tracking the global spread,
open https://tmsnrt.rs/3aIRuz7
in an external browser

By Brijesh Patel
April 28 (Reuters) - Gold prices fell for a third straight
session on Tuesday as optimism about the easing of
coronavirus-related restrictions drove investors towards riskier
assets, though global recession fears limited bullion's losses.
Spot gold XAU= was down 0.3% at $1,709.83 per ounce by
1213 GMT, after falling as much as 1.4% earlier in the session.
U.S. gold futures GCv1 were little changed at $1,724 per
ounce.
"Gold has lost some of its shine on the assumption that
easing lockdowns will bring a V-shaped recovery, and with that
less need for gold as a diversifier and hedge," Saxo Bank
analyst Ole Hansen said.
From Italy to New Zealand, governments announced the easing
of restrictions. More parts of the United States looked set to
restart business, though Britain said it is too dangerous to
relax a stringent lockdown for fear of a second outbreak.
European shares hovered near two-week highs as traders
cheered lockdown easing news, while a slate of strong earnings
reports from companies outweighed a slump in oil prices. .EU
Business shutdowns have led to a record 26.5 million
Americans filing for unemployment benefits since mid-March and
are likely to push the unemployment rate to 16% or higher in the
next report. Central banks around the world have rolled out fiscal and
monetary stimulus measures to combat financial impact from the
virus, which has infected about 3.03 million people globally and
killed 210,263. "The demand destruction due to Covid-19 cannot be
overstated, volatility in financial markets remains elevated and
precious metals especially gold remains as good hedge in an
investor's portfolio of other financial assets," said Avtar
Sandu, senior commodities manager at Phillip Futures, in a note.
The focus now shifts to two major central banks policy
meetings this week, following the Bank of Japan which expanded
monetary stimulus on Monday.
Gold tends to benefit from widespread stimulus measures from
central banks because it is widely viewed as a hedge against
inflation and currency debasement.
However, demand for physical metal showed signs of softness
during the lockdown. The China Gold Association said China's
gold consumption fell by almost half in the first quarter as
containment measures and rising prices hit demand in the world's
biggest market. "Weak physical demand is currently off-setting all the
positive hype about gold and with that there is a risk of a
period of consolidation and perhaps even lower prices," Hansen
said. "Overall, however, we believe that the reasons that has
brought gold to these levels will not go away when lockdowns are
eased."
Elsewhere, palladium XPD= rose 0.5% to $1,935 an ounce and
platinum XPT= gained 1% to $765.45. Silver XAG= dropped 0.6%
to $15.19 per ounce.