PRECIOUS-Gold slips on recovery hopes, U.S.-China worries limit losses

* SPDR Gold Trust holdings rose on Monday to a fresh 7-year
high
* For an interactive graphic tracking the global coronavirus
spread, open https://tmsnrt.rs/3aIRuz7 in an external browser

(Updates prices)
By Harshith Aranya
June 2 (Reuters) - Gold prices slipped on Tuesday as hopes
for a gradual recovery in economic growth rose following easing
of lockdowns, though deteriorating U.S.-China relations and
fears over the spread of the coronavirus amid protests in the
United States limited losses.
Spot gold XAU= was down 0.3% at $1,734.66 per ounce as of
0819 GMT. U.S. gold futures GCcv1 fell 0.2% to $1,746.10.
"It appears that there are factors both supporting, and
limiting appreciation in the gold price," said National
Australia Bank economist John Sharma.
The U.S. is likely to revoke Hong Kong's special status, and
China would retaliate by limiting purchase of U.S. products-
putting the Sino-U.S. trade deal in doubt, and providing support
to gold; while the easing of lockdowns is capping gains, Sharma
added.
In a sign that the worst of the economic downturn from the
coronavirus pandemic might be over, U.S. manufacturing activity
crawled up slightly from an 11-year low, and China's factory
activity unexpectedly returned to growth in May. "Gold's rally lacks momentum," said Jeffrey Halley, senior
market analyst at OANDA, adding that it is likely to be range
bound between $1,700 and $1,750 in the short term.
Despite some optimism about economies gradually reopening,
gold prices have gained in the previous three sessions, and hit
their highest on Monday since May 21.
Demonstrations over the death of an African American in
police custody continued in the United States; which also
sparked fears that it could worsen the spread of the
coronavirus, and hamper the world's biggest economy's recovery.
U.S. President Donald Trump stated he would deploy the
military, if required. Reflecting investor sentiment, SPDR Gold Trust GLD , the
world's largest gold-backed exchange-traded fund, said its
holdings rose 0.5% to 1,128.40 tonnes on Monday, the highest in
seven years. GOL/ETF
Elsewhere, palladium XPD= dropped 0.7% to $1,948.55 per
ounce, platinum XPT= was down 0.7% to $841.42, and silver
XAG= fell 0.5% to $18.18.