Gold rose on Thursday after hitting a two-week low in the previous session as the rift between Washington and Beijing over Hong Kong escalated, with prices also supported by central bank and government largesse to cushion the blow from the pandemic.
Spot gold was up 0.6 per cent at $1,718.77 per ounce, as of 0544 GMT, after dropping to $1,693.22 on Wednesday. US gold futures rose 0.5 per cent to $1,717.80.
Worsening relations between the world's two biggest economies could further hobble global business activity, which is already under intense pressure due to the coronavirus crisis.
"The US and China have disagreements on many fronts. There is trade, and there is inquiry into the coronavirus, and now this dispute over Hong Kong," said Michael McCarthy, chief strategist at CMC Markets.
"That's bad news for the globe as it spills over into trade- the impact on global growth, while the global economies are fragile, could be severe."
US Secretary of State Mike Pompeo said on Wednesday that Hong Kong no longer qualifies for its special status under US law, while President Donald Trump said he'd announce a response this week.
"The US is likely to respond to China's new security laws on Hong Kong ... Weak economies and continued low interest rates are also supporting gold," said National Australia Bank economist John Sharma.
Japan approved a fresh $1.1 trillion stimulus package, while the European Union unveiled one of 750 billion euros.
Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement.
Reflecting investor sentiment, SPDR Gold Trust holdings, the world's largest gold-backed exchange-traded fund, rose 0.2 per cent to 1,119.05 tonnes on Wednesday, a seven-year high.
Palladium rose 1.6 per cent to $1,966.30 per ounce and platinum gained 2.3 per cent to $837.72, while silver was flat at $17.30.