PRECIOUS-Gold rally loses steam on Trump plans to reopen U.S. economy

 (Updates throughout, adds comment)
    * China's economy registers first quarterly contraction
since 1992
    * Interactive graphic tracking the global spread: open tmsnrt.rs/3aIRuz7
 in an external browser

    By Brijesh Patel
    April 17 (Reuters) - Gold fell more than 1.5% on Friday as
investors opted for riskier assets after news of U.S. President
Donald Trump's plans to restart the U.S. economy and promising
early data related to a potential COVID-19 treatment.
    Spot gold        was down 1.4% at $1,693.20 an ounce by 0912
GMT, having this week scaled a seven-year peak on heightened
worries over the worst recession in decades.
    "The latest sentiment drift to the positive side and
narrative that a plan to return to normal is now afoot are
seeing spot gold trading back through $1,700-an-ounce technical
support," said Saxo Bank analyst Ole Hansen.
    Global financial markets drew comfort from Trump's plans for
a gradual reopening of the U.S. economy, overshadowing concern
over data showing China that suffered its worst quarterly
economic contraction on record.             
    Also lifting risk sentiment, a report detailed encouraging
partial data from trials of U.S. drugmaker Gilead Sciences Inc's
experimental drug remdesivir in severe COVID-19 patients.
            
    The pandemic, which has infected more than 2 million people
globally and killed 143,744, has battered economies and prompted
central banks to roll out a wave of monetary support measures.
            
    "While policymakers are eager to limit the economic damage,
the reopening of their respective countries could be upended by
a swift resurgence of the coronavirus," FXTM analysts said in a
note.
    "The broad rollout of a Covid-19 vaccine is still the
necessary catalyst for a return to life as it once was and would
be the spark required for a sustained rally in risk assets."
    Gold tends to benefit from widespread stimulus measures from
central banks because it is widely viewed as a hedge against
inflation and currency debasement.
    Lower interest rates also cut the opportunity cost of
holding non-yielding bullion.
    U.S. gold futures         fell 1.3% to $1,708.70, narrowing
their lead over London spot prices, signalling hopes for an
improvement in strained supply chain logistics that have
hampered bullion shipments to the United States to meet contract
requirements.        
    In other precious metals, palladium        rose 1.1% to
$2,176.35 an ounce, silver        dipped 2.6% to $15.21 and
platinum        was down 1.5% at $771.81.

 (Reporting by Brijesh Patel and Arpan Varghese in Bengaluru
Editing by David Goodman)
  
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