* EU and Japan unveil new stimulus measures
* Markets await U.S. initial jobless claims data at 1230 GMT
* SPDR gold holdings at seven-year peak
* For an interactive graphic tracking the global coronavirus spread, open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)
By Brijesh Patel
May 28 (Reuters) - Gold rebounded on Thursday as deteriorating U.S.-China relations over Beijing's move to impose a national security law in Hong Kong fanned concerns over the pace of economic recovery and drove investors towards the safe-haven metal.
Spot gold XAU= was up 0.7% at $1,720.25 per ounce by 1206 GMT, recovering from a two-week low of $1,693.22 the previous session.
U.S. gold futures GCv1 rose 0.6% to $1,737.10.
"The tensions between the U.S. and China continue to be rather on the high side. Overall, the market is a bit worried about the situation geopolitically and also economically," said Afshin Nabavi, senior vice president at precious metals trader MKS SA.
China's parliament approved national security legislation for Hong Kong on Thursday, fuelling fears it could jeopardise its special autonomy and freedoms. security law has lead to an escalation in tension between the United States and China and Washington has ramped up criticism of China over the origins of the coronavirus pandemic. friction has increased interest in gold as a safe investment during times of political and financial uncertainty.
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
"ETF holdings are reaching fresh highs, and we expect investment demand to outweigh the weaker physical offtake in Asian markets. We still see risks skewed to the upside," ANZ said in a note.
Fresh stimulus boosts also supported gold after Japan approved a $1.1 trillion package and the European Union unveiled one of 750 billion euros. are waiting for initial U.S. jobless claims data due at 1230 GMT.
Elsewhere, palladium XPD= eased 0.1% to $1,934.18 per ounce, while platinum XPT= rose 1.6% to $831.84 and silver XAG= was steady at $17.30.