PRECIOUS-Gold inches down as dollar recovers; focus turns to Georgia race

* Dollar index rebounds from 2-1/2-year low
* England goes into new national lockdown
* Fed likely to signal further easing - analyst
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

(Updates prices)
By Sumita Layek
Jan 5 (Reuters) - Gold eased on Tuesday after hitting an
eight-week high, as the U.S. dollar recovered ahead of Senate
runoff elections in Georgia that will decide the future path of
fiscal stimulus in the world's largest economy.
Spot gold XAU= dipped 0.1% to $1,939.56 per ounce by 0715
GMT, after hitting its highest since Nov. 9 at $1,945.26 earlier
in the session, while U.S. gold futures GCv1 edged 0.2% down
to $1,943.50.
"The dollar has strengthened overnight from an over two-year
low, that is weighing on prices," said DailyFX strategist
Margaret Yang. "Monday's rally largely priced in a Democratic
win in the Senate election, so we're seeing some profit-taking
as well."
Bullion jumped as much as 2.4% on Monday after the dollar
.DXY slipped to its lowest since April 2018, but since then
the U.S. currency has recovered. USD/
The dual runoff elections in Georgia will decide which party
controls the U.S. Senate. A Democratic victory in both races
could tip control of the Senate away from
Republicans. England went into a new national lockdown to contain a surge
in COVID-19 cases, while New York registered its first case of
the more contagious strain of coronavirus found in the
UK. "In view of still accelerating coronavirus crisis in the
U.S., the Fed will ... perhaps hint at further monetary support
and extension of the extra low interest rate environment beyond
2023," Yang said.
Minutes of the U.S. Federal Reserve's last policy meeting
are due on Wednesday. Gold's trend remains bullish as inflation expectations are
increasing, said Kunal Shah, head of research at Nirmal Bang
Commodities in Mumbai, adding that the Fed's dovish tone and a
weaker dollar would push the metal towards $2,000-$2,050 this
year.
The 10-year Treasury Inflation Protected Securities
breakeven inflation rate topped 2% for the first time since
November 2018 on Monday. US/
Silver XAG= rose 0.3% to $27.28, platinum XPT= lost 0.5%
to $1,064.88, and palladium XPD= gained 0.4% to $2,381.52.