* Silver notches up fresh seven-year peak
* Dollar falls to two-year low
* U.S. consulate in Chengdu closed as of Monday morning - China
* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)
By Nakul Iyer
July 27 (Reuters) - Gold stormed to a record high on Monday as investors sought refuge from the possible hit to a pandemic-stricken global economy from an escalation in the U.S.-China spat, which pummelled the dollar.
Spot gold XAU= hit a record high of $1,945.16 per ounce, and rose 1.8% to $1,934.62 by 1:38 p.m EDT (1738 GMT). U.S. gold futures GCv1 settled up 1.8% to $1,931.
Silver XAG= also rallied, jumping as much as 8% to $24.57, its highest since August 2013, and was up 6.9% at $24.31 per ounce.
"The dollar is losing its safe-haven appeal and you're going to continue to see gold surge as the dollar sinks," said Edward Moya, senior market analyst at broker OANDA.
"Everything is clicking for gold. There are high prospects the Federal Reserve is going to ramp up their efforts to repair the economy and the virus uncertainty is going to mean that the stimulus trade is going to remain."
The dollar index .DXY hit a two-year low on the U.S.-China tensions and concerns about the U.S. economy as COVID-19 infections show no signs of slowing in the world's largest economy. USD/ has risen 28% so far this year, marking a shift from before the pandemic, when the bullion had to compete with other safe havens such as the dollar, especially amid Sino-U.S. tensions, which had limited inflows into gold.
China on Monday took over the premises of the U.S. consulate in the southwestern city of Chengdu in retaliation for Beijing's ouster last week from its consulate in Houston, Texas. Senate Republicans are expected to unveil a $1 trillion coronavirus aid package. Investors will also eye the U.S. Fed's meeting starting Tuesday, where it could flag another accommodative policy shift. gold is considered a hedge against inflation and currency debasement, with analysts also pointing to massive inflows into gold-backed exchange traded funds as a driver behind its rally. GOL/ETF CFTC/
"A cure for COVID-19 has the potential to revive global risk sentiment and turbocharge investor confidence," FXTM analyst Lukman Otunuga said. tidal wave of optimism from such a positive development could send market players sprinting towards riskier assets at the expense of safe-havens."
Platinum XPT= rose 2% to $932.33 per ounce and palladium XPD= jumped 3.4% to $2,295.29.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Silver soars to 7-year hghs on gold's coattails
https://tmsnrt.rs/3jHwHAq Gold soars as dollar dips
https://tmsnrt.rs/39CUs8c
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