2020.05.2810:39:00UTC+00Gold Prices Rise Amid Hong Kong Uncertainty

Gold prices rose on Thursday as intensifying U.S.-China tensions compounded fears of a slow economic recovery.

Fresh fiscal stimulus proposals from the European Union and Japan also increased demand for the precious metal.

Spot gold climbed 0.8 percent to $1,722.52 per ounce, while U.S. gold futures were up 0.6 percent at $1,721.80.

U.S. Secretary of State Mike Pompeo announced on Wednesday that Hong Kong no longer merits special treatment under U.S. law, following Beijing's plan to impose a controversial new security law on the territory.

The declaration could have major implications for Hong Kong's status as a global financial and trading hub.

A punitive U.S. response to China on the issue of Hong Kong may prompt Beijing to take some proportionate countermeasures, further straining ties between the world's two largest economies.

On the stimulus front, the European Union proposed Wednesday a ?750 billion stimulus program to help limit the damage inflicted by the coronavirus pandemic.

The Japanese Cabinet approved a 31.91 trillion yen ($296 billion) second supplementary budget for the fiscal year through next March to reduce the social and economic impacts of the coronavirus outbreak.