* Gold hits record high, dollar falls
* Euro sails up through $1.17
* Asia tech shares gain as Intel shares plunge
* U.S.-China tensions keep investors on edge
* Earnings, U.S. stimulus talks in focus
* 2020 asset performance http://tmsnrt.rs/2yaDPgn
* European shares seen up 0.2%
By Marc Jones
LONDON, July 27 (Reuters) - Gold soared to an all-time high
on worsening ties between China and the United States, a
weakening dollar and ultra-low interest rates on Monday, while
stock markets looked uncertain before a corporate earnings
deluge.
Europe's equity markets saw a subdued start, perhaps still
hurting after their first weekly drop in four and as the euro's
fastest gains since early 2016 took it through $1.17 /FRX , but
it was the precious metals surge that dominated.
Gold rose another 1.6% to a record high of $1,943 per ounce
XAU= , surpassing its gains in September 2011. Silver climbed
another 5.5% XAG= to take its July streak past 30%, which
would be its best month on record. GOL/
A lot of factors were in play for markets, said Shafali
Sachdev, the head of FX Asia at BNP Paribas Wealth Management in
Singapore, from U.S.-China tensions to a second wave of
coronavirus outbreaks.
"If you look at the fact that the dollar's been higher
yielding than many other currencies for quite a while, and with
some of the benefits of that being eroded ... and also the
continued demand for a safe haven, it all plays into gold's
strengthening," she said.
"And at this point there doesn't seem any obvious factor
that could help the trend to draw to a close."
European stocks cut some of their early losses after data
from Germany showed an improvement in business morale
but it was going to be an effort to get out of the
red.
Travel and leisure stocks .SXTP were down 3%, with
UK-based airlines and tour operators such as TUI AG TUIGn.DE ,
TUIT.L , Easyjet EZL.L , British Airways owner IAG ICAG.L
falling 8% and to 13.5% after Britain imposed a 14-day
quarantine on travellers returning from Spain, where coronavirus
cases are rising again.
Asia was also choppy. A 10% rally in Taiwanese chipmaker
TSMC 2330.TW helped some other tech shares across the region,
after U.S. rival Intel INTC.O saw its shares plunge more than
16% on Friday. "Chipmaking machine makers may see reduced demand from Intel
for now, but as the jump in TSMC shows, markets are not
pessimistic about the semiconductor industry," said Yasuo
Imanaka, chief analyst at Rakuten Securities.
Elsewhere, mainland Chinese shares gave up most of their
early gains, with the CSI300 index .CSI300 closing up just
0.2%, after steep losses on Friday.
Japan's Nikkei .N225 fell 0.2%, though S&P500 futures
ESv1 steadied and were last up 0.4% in Europe. .N
Global shares had lost steam late last week after Washington
ordered China's consulate in Houston to close, prompting Beijing
to close the U.S. consulate in Chengdu.
U.S. Secretary of State Mike Pompeo said Washington and its
allies must use "more creative and assertive ways" to press the
Chinese Communist Party to change its ways. "U.S. President (Donald) Trump used to say China's President
Xi Jinping is a great leader. But now Pompeo's wording is
becoming so aggressive that markets are starting to worry about
further escalation," said Norihiro Fujito, chief investment
strategist at Mitsubishi UFJ Morgan Stanley Securities.
MORE STIMULUS
One key for markets this week will be earnings releases from
the world's main tech companies. Facebook reports on Wednesday,
and Amazon, Apple and Google are all due.
Hopes for a quick U.S. economic recovery are fading as
coronavirus infections showed few signs of slowing.
That means the economy could capitulate without fresh
support from the government, with some of the earlier steps such
as enhanced jobless benefits due to expire this month.
Investors hope U.S. Congress will agree on a deal before its
summer recess. U.S. Treasury Secretary Steve Mnuchin said the
package will contain extended unemployment benefits with 70%
"wage replacement" -- but there are some sticking
points.
Democrats, who control the House of Representatives, want
enhanced unemployment benefits of $600 per week to be extended
and look to much bigger stimulus compared with the Republicans'
$1 trillion plan.
Concerns about the U.S. economic outlook have also started
to weigh on the dollar. The dollar index USD= dropped 0.5% to
its lowest level in nearly two years.
The euro gained 0.5% to $1.1711 EUR= , hitting a 22-month
high, after a European agreement on a recovery fund last week
supported sentiment toward the common currency.
Against the yen, the dollar slipped 0.5% to 105.605 yen
JPY= , a four-month low while the British pound hit a 4
1/2-month high of $1.2832 GBP= .
Oil prices were capped on worries about the worsening
Sino-U.S. relations.
Brent futures LCOv1 slipped 0.05% to $43.32 per barrel.
U.S. crude futures CLc1 were flat at $41.29.
"The pressure is building on politicians to provide more
stimulus as the Covid-19 outbreak continues across the Americas,
with a second wave unfolding in Europe and Asia" said Jeroen
Blokland, portfolio manager at Robeco.
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