July 23 (Reuters) - Gold rose to its highest in nearly nine years on Thursday, driven by an escalation in U.S.-China tensions, while expectation of more stimulus measures lifted the metal's appeal as an inflation-hedge.
FUNDAMENTALS
* Spot gold XAU= was up 0.1% at $1,872.75 per ounce by 0048 GMT, after hitting its highest since September 2011 at $1,876.16 in early Asian trade.
* U.S. gold futures GCv1 rose 0.2% to $1,869.30.
* The United States gave China 72 hours to close its consulate in Houston amid accusations of spying, marking a dramatic deterioration in relations between the world's two biggest economies. Coronavirus cases continued to surge in the United States, with California officially becoming the worst-hit state, exceeding New York, with more than 414,000 cases of COVID-19. Leading U.S. Senate Republicans and the White House late on Wednesday said they had hammered out agreements in principle on portions of a potential coronavirus-response bill, which could be presented to Democrats as early as this week. Gold is often used as a safe store of value during times of political and financial uncertainty.
* Indicative of sentiment, SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings rose 0.4% to 1,225.01 tonnes on Wednesday from 1,219.75 tonnes on Tuesday. GOL/ETF
* Further helping gold, the dollar index .DXY held near a more than four-month low that it hit in the previous session. USD/
* Asian stocks were likely to come under pressure on Thursday as fresh diplomatic tensions between Washington and Beijing heightened investor jitters. MKTS/GLOB
* Silver XAG= fell 0.7% to $22.86 per ounce, platinum XPT= dropped 0.7% to $912.79, while palladium XPD= climbed 0.6% to $2,160.91.
DATA/EVENTS (GMT) 0645 France Business Climate Mfg
July 1230 US
Initial Jobless Claims Weekly 1400 EU
Consumer Confid. Flash July