* EU, Japan unveil new stimulus measures
* SPDR gold holdings rise 0.2% on Wednesday, at a 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
May 28 (Reuters) - Gold prices on Thursday recovered after touching a two-week low 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 XAU= was up 0.6% at $1,718.67 per ounce, as of 0748 GMT, having dropped to $1,693.22 on Wednesday before paring losses. U.S. gold futures GCcv1 rose 0.4% to $1,717.70.
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 U.S. 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."
U.S. Secretary of State Mike Pompeo said on Wednesday that Hong Kong no longer qualifies for its special status under U.S. law, while President Donald Trump said he'd announce a response this week. U.S. 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. stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement.
Reflecting investor sentiment, SPDR Gold Trust GLD holdings, the world's largest gold-backed exchange-traded fund, rose 0.2% to 1,119.05 tonnes on Wednesday, a seven year high. GOL/ETF
Palladium XPD= rose 1.8% to $1,970.79 per ounce and platinum XPT= gained 2.1% to $836.46, while silver XAG= was flat at $17.29.