Gold flat as Hong Kong concerns offset reopening optimism

Wednesday,   27-May-2020   09:01 AM (IST)

Gold traded flat on Wednesday as concerns about the U.S. response to China's proposed security law for Hong Kong countered optimism about a re-opening of the global economy. Spot gold was unchanged at $1,711.93 per ounce by 1243 GMT after a 1% drop on Tuesday. U.S. gold futures were also flat, at $1,705. U.S. President Donald Trump said on Tuesday the United States was working on a strong response to China's planned national security legislation for Hong Kong and it would be announced before the end of the week. Hong Kong's legislature was surrounded by riot police, as protests were expected on Wednesday over a bill criminalising disrespect of China's national anthem and against plans by Beijing to impose national security laws. Asian shares shed some of their recent gains on concerns about rising Sino-U.S. tensions. On Tuesday, the U.S. stock benchmark S&P 500 index broke through the psychologically-important 3,000 level, capping a 37% stock rally since its March low. U.S. consumer confidence nudged up in May, suggesting the worst of the coronavirus-driven economic slump was likely in the past as the country starts to reopen. The New York Stock Exchange opened on Tuesday for the first time in two months. However, economic prospects for the developed world this year have darkened again in the past month, with a V-shaped sharp recovery expected by less than one-fifth of economists polled by Reuters. Japan plans to include $302 billion in direct spending under a second extra budget to be compiled on Wednesday, the Mainichi newspaper reported. The dollar index rose 0.2%, making gold more expensive for holders of other currencies. Palladium  fell 1% to $1,936.99 per ounce and platinum slipped 0.5% to $825.62, while silver rose 0.2% to $17.13.