Gold falls as Japanese shares rise on potential stimulus report

Gold dipped on Monday as Japanese

equities rose on news about a potential stimulus program,

although losses were capped by a weaker dollar and worries of

fresh Sino-U.S. tensions over Hong Kong.

FUNDAMENTALS

* Spot gold fell 0.3% to $1,729.17 per ounce by 1241

GMT. U.S. gold futures were down 0.4% to $1,728.40.

* Japan is considering fresh stimulus worth over $929

billion, that mostly consist of financial aid programs for

companies hit by the coronavirus pandemic, the Nikkei newspaper

said.

* Japan’s Nikkei has jumped 1.5% following the

report. MSCI’s broadest index of Asia-Pacific shares outside

Japan rose 0.1%.

* The dollar index was down 0.1%, making

greenback-denominated gold cheaper for investors holding other

currencies.

* China dropped its annual growth target for the first time

on Friday and pledged more government spending, setting a somber

tone to this year’s meeting of parliament.

* Highlighting a return of political uncertainty, thousands

rallied on Sunday to protest against Beijing’s plan to impose

national security laws on Hong Kong.

* China’s proposed national security legislation for Hong

Kong could lead to U.S. sanctions and threaten the city’s status

as a financial hub, White House National Security Adviser Robert

O’Brien said on Sunday.

* SPDR Gold Trust holdings, the world’s largest

gold-backed exchange-traded fund, rose 0.4% to 1,116.71 tonnes

on Friday.

* Palladium gained 1.3% to $1,970.25 per ounce, while

platinum was down 1.1% to $830.75 and silver fell

0.4% to $17.12.

DATA/EVENTS (GMT)

0600 Germany GDP Detailed YY NSA Q1

0800 Germany Ifo Business Climate New May

(Reporting by Harshith Aranya in Bengaluru; Editing by

Subhranshu Sahu)