* Gold up more than 2% this month
* Silver set for biggest monthly gain in about 4 years
* Dollar drops to more than two-month low
* For an interactive graphic tracking the global coronavirus spread, open https://tmsnrt.rs/3aIRuz7 in an external browser (Recasts, updates prices)
By Brijesh Patel
May 29 (Reuters) - Gold prices rose on Friday as the dollar weakened, with investors cautiously awaiting Washington's response to the Chinese parliament's approval of a national security law for Hong Kong.
Spot gold XAU= was up 0.5% at $1,727.36 an ounce by 1201 GMT. U.S. gold futures GCv1 rose 0.9% to $1,742.40.
U.S. President Donald Trump is expected to hold a news conference on China later on Friday as his administration moves to pressure Beijing over its treatment of Hong Kong. with many economies reopening, the economic status is still quite weak. So with this new geopolitical tension it means that recovery in many parts of the world can take longer, which could lift gold prices," said Bank of China International analyst Xiao Fu.
Escalating U.S.-China tension has prompted investors to seek refuge in bullion, which is widely viewed as a safe-haven investment during times of political and financial uncertainty and is on track for a more than 2% monthly gain.
The dollar index .DXY slipped 0.4% to a more than two-month low, making gold less expensive for holders of other currencies. .DXY
Further helping gold's appeal were unprecedented stimulus measures rolled out by central banks to limit economic damage caused by the coronavirus outbreak, analysts said.
Indicative of sentiment, SPDR Gold Trust GLD holdings hit a seven-year high on Wednesday. GOL/ETF
Elsewhere, silver XAG= jumped 1.4% to $17.66 an ounce and was heading for its biggest monthly gain since June 2016.
"Silver investment demand has been strong, but industrial demand has capped upside to prices; stronger offtake from manufacturers should help the white metal," Bank of America (NYSE:BAC) analysts wrote in a note.
Palladium XPD= rose 0.5% to $1,940.55 an ounce but was set for a third straight monthly fall. Platinum XPT= eased 0.1% to $837.67 but was on track for a second consecutive monthly gain.