(Corrects typo in paragraph 1)
* Gold jumps above $1,900 an ounce
* European shares set for worst day in a month
* Markets eye escalating U.S.-China tensions
* Intel's tumble leads tech stocks lower
* Graphic: U.S.-China tensions: https://tmsnrt.rs/2BrVRll
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Herbert Lash and Tom Arnold
NEW YORK/LONDON, July 24 (Reuters) - Shares worldwide
skidded further on Friday as a pick-up in U.S. and European
business activity did little to ease investors' jitters
surrounding Sino-U.S. tensions, while gold kept marching toward
a record high as it broke above $1,900 an ounce.
The mood darkened after Beijing ordered Washington to close
the U.S. consulate in Chengdu, in retaliation for China being
told to shut its consulate in Houston earlier this week.
European equities fell, even as data showed business
activity in the euro zone returned to growth. German
manufacturing avoided contraction for the first time in 19
months in July with a notable upturn in sales abroad.
U.S. business activity rose to a six-month high in July, but
companies reported a drop in new orders as a resurgence in new
COVID-19 cases across the country weighed on demand.
Technology stocks .SX8P such as SAP SE SAPG.DE and ASML
Holding NV ASML.AS led losses in Europe, while the
China-sensitive basic materials sector .SXPP lost 2.3%.
A 17% slide in Intel Corp INTC.O shares after the company
said it was six months behind schedule in developing
next-generation, power-efficient chip technology pushed U.S.
stocks lower, but U.S.-China concerns remained front and center.
"An escalation in U.S.-China tensions that could have hugely
negative consequences on stock market leadership, particularly
around the U.S. tech giants, is worrying," said Stephen Innes,
chief global market strategist at AxiCorp.
"What ultimately matters for growth assets is whether a
geopolitical escalation morphs into economic beatdowns."
MSCI's benchmark for global equity markets .MIWD00000PUS
slid 0.73% while emerging markets stocks .MSCIEF fell 1.69%.
On Wall Street, the Dow Jones Industrial Average .DJI fell
0.26%, the S&P 500 .SPX lost 0.46% and the Nasdaq Composite
.IXIC dropped 0.9%.
Overnight in Asia, Chinese blue chips .CSI300 retreated
4.4% to wipe out a week of gains and lead declines.
The Chinese yuan, a barometer of Sino-U.S. relations, was
set for its worst week since mid May. It was down 0.2% at 7.0235
per dollar in the offshore market CNH=EBS .
Gold resumed its march toward $1,900 as the souring
U.S.-China relations added fuel to a rally driven by fears over
the economic hit from the coronavirus pandemic.
The dispute put copper - a prime Chinese import - on track
for its first weekly loss since mid-May, but analysts expect
recovering demand and low stocks to keep prices high.
Spot gold prices XAU= rose 0.86% to $1,903.11 an ounce,
less than $25 from an all-time peak in 2011.
Analysts at RBC Capital Markets noted gold-backed exchange
traded product holdings had already reached record peaks.
"The level of COVID-19 uncertainty, low and negative real
and nominal rates, politics and geopolitics have driven gold
prices sharply higher, and pushed allocations among investors
ever higher," they said in a note.
Silver, meanwhile, was en route to its best week since 1987,
up almost 18% in five days.
Oil prices edged higher, supported by a weaker dollar. But
U.S.-China tensions and wider economic uncertainty weighed.
Brent crude futures LCOc1 rose $0.02 to $43.33 a barrel.
U.S. crude futures CLc1 gained $0.07, to $41.14 a barrel.
The euro EUR= advanced 0.33% to $1.1632, strengthened by
European Union's approval on Monday of a 750 billion-euro ($857
billion) recovery fund to revive the region's economies.
The yen JPY= fell 1.02% to $105.7600.
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