PRECIOUS-Hopes of gradual economic recovery weigh on gold

(Adds comments, details and updates prices)
* SPDR gold holdings jump to 7-year high
* Palladium hovers around more-than 1-month low
* U.S. service sector activity contracts in April
* For an interactive graphic tracking the global spread,
open https://tmsnrt.rs/3aIRuz7
in an external browser

By K. Sathya Narayanan
May 6 (Reuters) - Gold slipped on Wednesday as the easing of
coronavirus-driven restrictions by several nations raised
prospects of a gradual recovery in economic activity, denting
the bullion's safe-haven appeal.
Spot gold XAU= eased 0.1% to $1,704.69 per ounce by 0703
GMT. U.S. gold futures GCcv1 gained 0.1% to $1,712.10.
There is "optimism about the outlook for economies as we
start to move away from lockdown," said Michael McCarthy, chief
strategist at CMC Markets.
Gold prices ended higher in the previous three sessions, and
have risen about 17% since mid-March, as uncertainty remained
with the virus spreading and as U.S.-China trade tensions
re-emerged.
"There is fear about another wave of trade war between U.S.
and China. So, investment demand is rising - ETF holdings are
rising," said Jigar Trivedi, commodities analyst at Anand Rathi
Shares and Stock Brokers in Mumbai.
Holdings in the world's largest gold-backed exchange-traded
fund (ETF), SPDR Gold Trust GLD , rose 0.4% to 1,076.39 tonnes
on Tuesday, the highest level since April 2013. GOL/ETF
U.S. President Donald Trump urged China to be transparent
about the origin of the virus as his administration weighs new
tariffs on Beijing for its handling of the virus, which has now
infected more than 3.67 million people globally and disrupted
economic growth. CMC Markets' McCarthy said that there were market doubts
whether the U.S. would be bullish enough to spark another trade
dispute while economies are recovering from the virus.
"We are seeing support for safe-haven yen and the U.S.
dollar is also holding up quite well. So there clearly are
different views about the outlook for the global economy."
The U.S. dollar .DXY rose for a fourth straight session,
making gold costlier for investors holding other currencies.
USD/
Underscoring the deepening economic impact of COVID-19, data
showed that the U.S. services sector contracted for the first
time in nearly 10-1/2-years in April. Elsewhere, silver XAG= rose 0.5% to $15.10 per ounce and
platinum XPT= gained 0.7% to $769.60.
Palladium XPD= rose 1.3% to $1,823.67, having touched a
more-than one-month low on Tuesday. Prices of the metal, widely
used in catalytic converters to reduce harmful emissions from
cars, have plunged nearly 40% from a record high hit on Feb. 27.
Prices of platinum group metals could fall 15-20% in near
term on rising surplus, though it could be seen as a longer-term
buying opportunity, Citigroup said in a note.