* Gold hits record, silver joins 30% rise in July
* Dollar in the 22-month low, the euro rises to $ 1.17
* Asia tech stock gains after Intel crash
* Tensions between the United States and China keep investors on edge
* Earnings, US stimulus talks in focus
* Global Asset Return 2020 tmsnrt.rs/2yaDPgn
* World exchange rates in 2020 tmsnrt.rs/2egbfVh
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By Marc Jones
LONDON, July 27 (Reuters) – Gold rose to a record high as worsening ties between the United States and China, a sinking dollar and ultra-low interest rates on Monday, as equity markets faltered in the face of a deluge of corporate earnings.
Europe’s major stock markets were still hurting after their first weekly decline in four and as the euro’s fastest gains since early 2016 topped $ 1.17, but it was the weakening of the dollar and the rise in precious metals that dominated.
Gold jumped 1.6% to surpass its 2011 highs and put $ 2,000 an ounce in its sights. Silver rose another 7.5% to spend its July streak more than 30%, which would be its best month on record.
Many factors were at play for the markets, said Shafali Sachdev, head of FX Asia at BNP Paribas Wealth Management in Singapore, from tensions between the United States and China to a second wave of coronavirus outbreaks.
“If you look at the fact that the dollar has been performing higher than many other currencies for quite some time, and with some of the benefits that it has eroded … and also the continued demand for a safe haven, it all plays out. in gold. ” strengthening, “he said.
“And at this point there doesn’t seem to be any obvious factor that can help the trend come to an end.”
European stocks cut some early losses after Germany’s data showed an improvement in business morale, but continued to struggle.
Travel and leisure stocks fell almost 2.5%, with airlines and tour operators such as TUI AG, Easyjet, the owner of British Airways, IAG, falling between 7.5% and 12% after Britain imposed a 14-day quarantine on travelers returning from Spain, where the coronavirus cases are on the rise again.
Asia was also choppy. A 10% rebound in Taiwanese chipmaker TSMC helped the tech sector after US rival Intel saw its shares drop more than 16% on Friday.
Elsewhere, mainland stocks gave up most of their initial gains, with the CSI300 index closing just 0.2%, after heavy losses on Friday as well.
Japan’s Nikkei fell 0.2%, although S&P 500 futures stabilized and lasted 0.5% in Europe.
Global actions had lost strength late last week after Washington ordered the closure of the Chinese consulate in Houston, prompting Beijing to close the U.S. consulate in Chengdu.
United States Secretary of State Mike Pompeo said Washington and its allies must use “more creative and assertive ways” to pressure the Chinese Communist Party to change its ways.
“The President of the United States (Donald) Trump used to say that the President of China, Xi Jinping, is a great leader. But now Pompeo’s newsroom is becoming so aggressive that markets are beginning to worry about further escalation, “said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
MORE STIMULUS
Key to the markets this week will be the last meeting of the US Federal Reserve, US gross domestic product figures and earnings posts from the world’s top tech companies, including Facebook on Wednesday and Amazon, Apple and Google on Thursday.
Hopes for a rapid economic recovery in the United States are fading as coronavirus infections showed little sign of slowing down.
That means the economy could capitulate without new government support, with some of the previous steps, such as improving unemployment benefits due this month.
Investors hope that the United States Congress will reach an agreement before its summer recess. United States Treasury Secretary Steve Mnuchin said the package will contain extended unemployment benefits with a 70% “wage replacement”, but there are some trouble spots.
Democrats, who control the House of Representatives, want the enhanced unemployment benefits of $ 600 per week to be extended and are looking for a much bigger stimulus compared to the Republicans’ $ 1 trillion plan.
Concerns about the US economic outlook have also begun to weigh on the dollar. The dollar index fell 0.5% to its lowest level in almost two years.
The euro gained 0.5% to a 22-month high of $ 1.1725, continuing a winning streak since last week’s deal on a post-pandemic EU recovery fund of € 750 billion.
Against the yen, the dollar fell 0.7% to 105,355 yen, a four-month low. The British pound hit a four-month high a month of $ 1.2868 and the benchmark Bunds and Treasuries gained ground in the bond markets.
Oil prices were limited by concerns about worsening Sino-US relations and new and recurring waves of the coronavirus worldwide, which have now infected more than 16 million people and killed nearly 650,000.
Brent futures were at $ 43.40 per barrel and US crude futures at $ 41.44.
Additional reports from Sujata Rao in London, Hideyuki Sano in Tokyo and Tom Westbrook in Singapore; editing by Larry King
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