PRECIOUS-Gold prices rise as Hong Kong dispute riles China-U.S. ties

* EU, Japan unveil new stimulus measures
* SPDR gold holdings rise 0.2% on Wednesday, at a 7-year
high
* For an interactive graphic tracking the global coronavirus
spread, open https://tmsnrt.rs/3aIRuz7 in an external browser

(Updates prices)
By Harshith Aranya
May 28 (Reuters) - Gold prices on Thursday recovered after
touching a two-week low the previous session, as the rift
between Washington and Beijing over Hong Kong escalated, with
prices also supported by central bank and government largesse to
cushion the blow from the pandemic.
Spot gold XAU= was up 0.6% at $1,718.67 per ounce, as of
0748 GMT, having dropped to $1,693.22 on Wednesday before paring
losses. U.S. gold futures GCcv1 rose 0.4% to $1,717.70.
Worsening relations between the world's two biggest
economies could further hobble global business activity, which
is already under intense pressure due to the coronavirus crisis.
"The U.S. and China have disagreements on many fronts. There
is trade, and there is inquiry into the coronavirus, and now
this dispute over Hong Kong," said Michael McCarthy, chief
strategist at CMC Markets.
"That's bad news for the globe as it spills over into trade-
the impact on global growth, while the global economies are
fragile, could be severe."
U.S. Secretary of State Mike Pompeo said on Wednesday that
Hong Kong no longer qualifies for its special status under U.S.
law, while President Donald Trump said he'd announce a response
this week. "The U.S. is likely to respond to China's new security laws
on Hong Kong ... Weak economies and continued low interest rates
are also supporting gold," said National Australia Bank
economist John Sharma.
Japan approved a fresh $1.1 trillion stimulus package, while
the European Union unveiled one of 750 billion euros.
Large stimulus measures tend to support gold, which is often
considered a hedge against inflation and currency debasement.
Reflecting investor sentiment, SPDR Gold Trust GLD
holdings, the world's largest gold-backed exchange-traded fund,
rose 0.2% to 1,119.05 tonnes on Wednesday, a seven year high.
GOL/ETF
Palladium XPD= rose 1.8% to $1,970.79 per ounce and
platinum XPT= gained 2.1% to $836.46, while silver XAG= was
flat at $17.29.