Gold prices dip on profit-taking in thin trade

Gold eased on Monday in holiday-thinned

trade as some investors took profits, though lingering

U.S.-China tensions and extensive stimulus measures by

governments worldwide limited decline.

Spot gold fell 0.3% to $1,728.55 per ounce by 1:58

p.m. EDT (1758 GMT). U.S. gold futures fell 0.5% to

$1,727.40. Most markets were closed in the United States,

Britain and some Asian countries for public holidays.

“With all the uncertainties going on in the world and

governments injecting money into their economies and interest

rates going lower, gold specifically has a good possibility to

test new highs sooner than later,” said Afshin Nabavi, senior

vice president at precious metals trader MKS SA.

Profit taking, lack of volume and follow-through on the

upside were weighing on gold on Monday, Nabavi added.

European shares gained on optimism over easing lockdowns and

signs of more stimulus for the euro zone economy.

Last week, gold climbed to its highest since October 2012,

driven by monetary and fiscal stimulus, recession fears and

U.S.-China tensions.

Trade war tensions are on the rise, which should continue to

support gold prices over the short term, Stephen Innes, chief

market strategist at financial services firm AxiCorp, said in a

note.

Beijing’s proposed national security legislation for Hong

Kong could lead to U.S. sanctions, White House National Security

Adviser Robert O’Brien said on Sunday.

China’s gold imports via Hong Kong in April plunged 176% to

-10.3 tonnes versus the previous month, data showed on Monday.

SPDR Gold Trust holdings rose 0.4% to 1,116.71 tonnes

on Friday, while speculators increased bullish positions in

COMEX gold contracts in the week to May 19.

Palladium gained 2.3% to $1,991.50 per ounce, while

platinum rose 0.6% to $844.75, and silver rose

0.1% to $17.20.

(Reporting by Eileen Soreng in Bengaluru; editing by Jonathan

Oatis and Nick Zieminski)