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Gold flat as Hong Kong concerns offset reopening optimism

Kitco News

May 27 (Reuters) - 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.

(Reporting by Harshith Aranya in Bengaluru; Editing by Subhranshu Sahu)

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