PRECIOUS-Gold gains as U.S.-China tensions boost demand

* EU and Japan unveil new stimulus measures
* Markets await U.S. initial jobless claims data at 1230 GMT
* SPDR gold holdings at seven-year peak
* For an interactive graphic tracking the global coronavirus
spread, open https://tmsnrt.rs/3aIRuz7 in an external browser

(Updates prices)
By Brijesh Patel
May 28 (Reuters) - Gold rebounded on Thursday as
deteriorating U.S.-China relations over Beijing's move to impose
a national security law in Hong Kong fanned concerns over the
pace of economic recovery and drove investors towards the
safe-haven metal.
Spot gold XAU= was up 0.7% at $1,720.25 per ounce by 1206
GMT, recovering from a two-week low of $1,693.22 the previous
session.
U.S. gold futures GCv1 rose 0.6% to $1,737.10.
"The tensions between the U.S. and China continue to be
rather on the high side. Overall, the market is a bit worried
about the situation geopolitically and also economically," said
Afshin Nabavi, senior vice president at precious metals trader
MKS SA.
China's parliament approved national security legislation
for Hong Kong on Thursday, fuelling fears it could jeopardise
its special autonomy and freedoms. The security law has lead to an escalation in tension
between the United States and China and Washington has ramped up
criticism of China over the origins of the coronavirus pandemic.
The friction has increased interest in gold as a safe
investment during times of political and financial uncertainty.
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
"ETF holdings are reaching fresh highs, and we expect
investment demand to outweigh the weaker physical offtake in
Asian markets. We still see risks skewed to the upside," ANZ
said in a note.
Fresh stimulus boosts also supported gold after Japan
approved a $1.1 trillion package and the European Union unveiled
one of 750 billion euros.
Investors are waiting for initial U.S. jobless claims data
due at 1230 GMT.
Elsewhere, palladium XPD= eased 0.1% to $1,934.18 per
ounce, while platinum XPT= rose 1.6% to $831.84 and silver
XAG= was steady at $17.30.