PRECIOUS-Gold firms to over 7-year high as U.S.-China tensions fuel economic worries

(New throughout, updates prices, market activity and comments)
* Gold eyes best week in three
* Silver hits $16.71/oz, highest since March 12
* Palladium on track to record seventh straight weekly loss
* U.S. retail sales plunge 16.4% in April

By Eileen Soreng
May 15 (Reuters) - Gold jumped more than 1% on Friday to
levels last seen in 2012, as renewed U.S.-China trade tensions
added to concerns about a deep economic slump due to the
coronavirus pandemic.
Spot gold XAU= rose 0.7% to $1,741.65 per ounce by 2:49
p.m. EDT (1847 GMT). During the session it hit its highest since
November 2012 at $1,751.25. Bullion has risen over 2% so far
this week.
U.S. gold futures GCv1 settled 0.9% higher at $1,756.30.
"While subdued physical demand and central bank buying may
have slowed its ascent, there's very little reason to sell gold
in a time of unprecedented public largesse and deteriorating
relations between the world's economic super powers," said Tai
Wong, head of base and precious metals derivatives trading at
BMO.
Underpinning the damage inflicted by the outbreak was the
latest U.S. retail sales data that showed a second straight
month of record declines in April. Adding to the bleak economic scenario was renewed friction
between the United Sates and China over the outbreak, with
President Donald Trump suggesting he could even cut ties with
Beijing. .N
"People are reluctant to take risk and the future seems
quite uncertain... Gold gives you that sense of protection right
now because we're going into this period," said Phil Streible,
chief market strategist at Blue Line Futures in Chicago.
The novel coronavirus, which has infected over 4.46 million
people and killed 301,445, has hammered global economic
activity, prompting central banks and governments to unleash
massive stimulus measures. Gold tends to benefit from economic stimulus because it is
widely viewed as a hedge against inflation and currency
debasement.
Though many governments have started easing restrictions,
the move has rekindled concerns of a second wave of infection.
"Given all of this chaos and confusion, it is hardly
surprising that gold ETFs are seeing an unchanged high level of
buying interest," analysts at Commerzbank said in a note.
"If speculators were now to jump on the bandwagon too, gold
would rise quickly towards the $1,800 mark."
SPDR Gold Trust GLD holdings, the world's largest
gold-backed exchange-traded fund, jumped 1.2% to 1,104.72 tonnes
on Thursday - its highest in more than seven years. GOL/ETF
Elsewhere, palladium XPD= climbed 1.9% to $1,870.28 per
ounce, but was on track to post its seventh straight weekly
drop.
Platinum XPT= rose 3.2% to $792.24 per ounce, having hit a
high since March 13 at $796.
Silver XAG= was 4.3% higher $16.55. It touched a more than
two-month peak of $16.71 earlier.