PRECIOUS-Gold retreats on optimism over U.S. plans to restart economy

(Adds comments, details and updates prices)
* Gold on track for second straight weekly rise
* China's economy shrinks for first time since 1992 in Q1
* Dip below $1,700/oz to trigger further falls in gold-
analyst
* Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7
in an external browser

By Shreyansi Singh
April 17 (Reuters) - Gold prices fell more than 1% on Friday
as risk appetite improved over initial plans to reopen the U.S.
economy and early signs of success in a COVID-19 treatment drug
trial.
Spot gold XAU= eased 0.9% to $1,701.99 per ounce by 0706
GMT, having fallen as much as 1.9% earlier in the day. However,
the metal was up about 0.5% for the week so far, on track for
its second straight weekly rise due to heightened worries over
the worst recession in decades.
U.S. gold futures GCcv1 slipped 0.7% $1,718.80 per ounce.
While there is a "temporal mismatch" between the financial
markets and the real economy, the reopening of the U.S. economy
is suggesting a recovery may come a lot quicker than expected,
in turn weighing on gold, said Stephen Innes, chief market
strategist at financial services firm AxiCorp.
U.S. President Donald Trump proposed guidelines on Thursday
aimed at reviving the U.S. economy from its coronavirus
shutdown. Gold prices fell as the dollar, also considered a safe
haven, also slipped after an encouraging report related to the
U.S. experimental COVID-19 treatment drug. USD/ That report was also spurring profit booking in the gold
market ahead of the weekend, said Ajay Kedia, director at Kedia
Commodities in Mumbai.
Investors also took stock of data from China, which showed
the country's economy shrank for the first time since at least
1992 in the first quarter due to the outbreak, although
industrial output fell a less steeper-than-expected 1.1% in
March, from a year earlier. "The China data has already been discounted in the market,"
Kedia added.
Asian stocks gained on Friday as President Trump's plans to
gradually re-open the U.S. economy offset negative data from
China. MKTS/GLOB
However, massive stimulus measures from global central banks
to weather the economic toll from the coronavirus limited gold's
downside, as it is often seen as a hedge against inflation and
currency debasement. The U.S. Federal Reserve's balance sheet increased to a
record $6.42 trillion this week as it unveiled measures to keep
markets functioning amid an abrupt economic free-fall.
The global pandemic, which has infected 2.07 million
globally and killed 138,482, according to a Reuters tally as of
Tuesday, continued to fuel strong demand for physical gold,
analysts said. Palladium XPD= gained 2.1% to $2,199.18 an ounce, while
silver XAG= slipped 2.6% to $15.21 per ounce and platinum
XPT= fell 0.9% to $776.21 per ounce.