PRECIOUS-Gold eases as dollar extends rally; U.S.-China ties in focus

* Dollar hits near 1-week high
* Gold could fall to $2,000, but still in favour -analyst
* Interactive graphic tracking global spread of coronavirus:
open
https://tmsnrt.rs/3aIRuz7 in an external browser

(Updates prices)
By Nakul Iyer
Aug 10 (Reuters) - Gold prices edged lower on Monday and
retreated sharply from a record peak in the last session, as the
dollar made further gains with investors keeping a cautious eye
on the U.S.-China spat ahead of key trade talks on Aug. 15.
Spot gold XAU= fell 0.2% to $2,031.39 per ounce by 1225
GMT. U.S. gold futures GCcv1 rose 0.7% to $2,041.60 per ounce.
Gold hit a record high of $2,072.50 on Friday but pulled
back as much as 2.5%, hurt by a bounce in the dollar after data
showed the U.S. economy added 1.763 million jobs in July. USD/
"We're seeing a little bit of a top (in gold) in the short
to medium term and because of the rebound of the dollar, we
could see a little bit of a drift lower over the course of the
next few days" said Michael Hewson, chief market analyst at CMC
Markets UK.
While gold could decline further towards $2,000 or lower as
investors book profits, bullion hasn't lost its lustre, he
added.
The dollar has at times been the favoured refuge amid
escalations between Washington and Beijing, and hit a near-one
week high earlier in the day, with investors also focusing on
fiscal stimulus in the U.S. ahead of trade talks on Aug. 15.
USD/
Escalating tensions with the United States, China said it
would impose sanctions against U.S. officials, after Washington
imposed sanctions on Hong Kong and Chinese officials on Friday.

Unprecedented global stimulus packages due to the COVID-19
pandemic have buoyed gold's appeal as a hedge against inflation
and currency debasement, driving it 34% higher so far this year.
"As long as the price remains above $2,000, the bullish
momentum can continue, as the hunger for gold is still at its
peak," ActivTrades chief analyst Carlo Alberto De Casa said in a
note. Silver XAG= rose 0.3% to $28.37 per ounce, platinum XPT=
gained 2% to $981.12 per ounce, and palladium XPD= was also up
0.7% at $2,191.90 per ounce.