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

  • Reuters
  • Commodities News
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: (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. 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. 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. 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.

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