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· Gold declined on Monday as Japanese equities rose on news of a potential stimulus programme that boosted investors' risk appetite, though fresh tensions over Hong Kong limited the metal's fall.

Spot gold was down 0.5% at $1,725.18 per ounce by 0700 GMT. U.S. gold futures fell 0.6% to $1,725.60.

· "I think the play into stocks and other risk assets has probably supported the risk appetite, and diminished the appeal for gold in the short term," said IG Markets analyst Kyle Rodda.

"There still seems to be the broad issue of gold prices trying to break too far above the $1,740, $1,750 mark."

Gold on Friday rose as much as 0.8% to touch $1,739.51, before paring gains.

· Japan is considering fresh stimulus worth over $929 billion, which mostly consists of financial aid programmes for companies hit by the coronavirus pandemic, the Nikkei newspaper said.

Japan's Nikkei index jumped 1.7% following the report.

Highlighting a return of political uncertainty, thousands rallied on Sunday to protest against Beijing's plan to impose national security laws on Hong Kong.

· The proposed national security legislation for Hong Kong could lead to U.S. sanctions and threaten the city's status as a financial hub, White House National Security Adviser Robert O'Brien said on Sunday.

Gold is seen as a safe-haven asset during political and economic uncertainties.

· Reflecting investor sentiment, SPDR Gold Trust holdings, the world's largest gold-backed exchange-traded fund, rose 0.4% to 1,116.71 tonnes on Friday.

Speculators increased their bullish positions in COMEX gold and silver contracts in the week to May 19, the U.S. Commodity Futures Trading Commission said on Friday.

Overall trading is expected to be subdued with U.S. and UK markets shut for public holidays.

· Gold Price Analysis: XAU/USD down by $6 in Asia, weekly chart shows bullish trend exhaustion

The yellow metal is currently changing hands $1,728 per ounce, representing a 0.40% decline on the day, having hit a high of $1,735 in early Asia.

The pullback looks confounding if we take into account the lingering US-China concerns and heightened prospects of a prolonged economic downturn in the US, the world's largest economy.

However, the decline doesn't look surprising from the technical analysis perspective. The weekly chart shows the metal formed a spinning top candle (small body and large wicks) in the five days to May 22. The candlestick pattern has appeared following a notable rally from $1,451 to $1,765 and indicates buyer exhaustion.

Meanwhile, the daily chart is reporting a bearish candlestick arrangement - prices fell by 1.24% on Thursday and closed below $1,727, confirming the bearish reversal signaled by the inverted hammer created on May 18. On the hourly chart, the metal is trapped in a falling channel.

As a result, gold could suffer a deeper decline to $1,720 (5-week simple moving average), under which, major support is seen at $1,700.

A falling channel breakout on the hourly chart, if confirmed, would imply an end of the price pullback from the 7.5-year high of $1,765 and shift risk in favor of a re-test of that level.

· Gold Survey | Wall St., Main St. look for gold to regain its luster

Wall Street and Main Street look for gold prices to rise next week, according to the weekly Kitco News gold survey.

Traders and analysts who make up the Wall Street poll continued to cite the mass liquidity being dumped into the global economy to offset damage from the COVID-19 pandemic. Also, they pointed to rising U.S.-China tensions that were helping gold pare some of this week’s losses on Friday.

· Palladium rose 0.5% to $1,956.60 per ounce; while platinum was down 1.1% at $830.19, and silver dropped 1.6% to $16.91.