REFILE-PRECIOUS-Gold jumps to 3-week high as recession, trade risks mount

(Fixes Reuters Instrument Codes in paragraph 9 and 13)
* Weekly jobless claims total 2.981 million
* Gold hits a high since April 23 at $1,735.96/oz
* SPDR gold holdings hit fresh seven-year high

By Eileen Soreng
May 14 (Reuters) - Gold climbed to a three-week high on
Thursday, propelled by safe-haven demand, as investors ditched
riskier assets on concerns over long-drawn economic weakness and
renewed U.S.-China trade tensions.
Spot gold XAU= rose 0.7% to $1,727.70 per ounce by 1:50
p.m. EDT (1750 GMT), having earlier hit a high since April 23 at
$1,735.96. U.S. gold futures GCv1 settled 1.4% higher at
$1,740.90.
"It seems some investors turned bearish on equities,
U.S.-China relations continue to head to a downward spiral and
you have very bleak data coming from the U.S. and its all
supporting safe-haven (demand)," said Edward Moya, a senior
market analyst at broker OANDA.
"Gold prices have been coiling up over the last couple of
weeks but it seems now you have the macro-economic backdrop that
is going to support high prices in the near-term."
U.S. Federal Reserve Chairman Jerome Powell warned on
Wednesday of an "extended period" of weak economic growth, vowed
to use the central bank's power as needed, and called for
additional fiscal spending to stem the fallout from the
coronavirus pandemic. Latest data show initial claims for state unemployment
benefits totaled 2.981 million for the week ended May 9. While
that was down from 3.176 million in the prior week and marked
the sixth straight weekly drop, claims remain astoundingly high.

World stock markets fell for a third day in a row as the
disappointing jobs data and signals by central banks that
further government stimulus may be needed stoked investor
concerns about the global economic recovery. MKTS/GLOB
Gold also benefited from renewed uncertainty over Sino-U.S.
trade after President Donald Trump said he was very disappointed
in China over its failure to contain the coronavirus, saying the
worldwide pandemic cast a pall over his trade deal with Beijing.
Indicative of sentiment, SPDR Gold Trust GLD holdings, the
world's largest gold-backed exchange-traded fund (ETF), jumped
to a fresh seven-year high of 1,092.14 tonnes on Wednesday.
GOL/ETF
"While ETF investors with a longer-term view have continued
to accumulate gold, hedge funds have cut bullish bets to an
11-month low," Saxon Bank analyst Ole Hansen said.
"A sustained breakout could force these funds to get down
from the fence and back into the market. If realized, it could
be the driver behind the next move higher."
Elsewhere, palladium XPD= rose 0.1% to $1,820.61 an ounce.
Platinum XPT= gained 1% to $763.94 per ounce, while silver
XAG= was 0.8% higher at $15.77.

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