(C) Reuters.

By Bryan Wong

Investing.com – Gold was down on Tuesday morning in Asia over a recovering dollar and expectations of a nearing U.S. stimulus. But worsening Sino-U.S. relations, as well as ever-rising number of COVID-19 cases, capped losses for the yellow metal.

Gold futures dropped by 0.51% to $2,020 by 12:32 AM ET (5:32 AM GMT).

The dollar was up on Tuesday, with the U.S. Congress looking to restart negotiations on a COVID-19 deal. U.S. President Donald Trump also tweeted that top congressional Democrats wanted to meet with him on COVID-19 related economic relief.

Investors will be seeing whether the Republicans and the Democrats will now be able to reach a consensus on the latest stimulus measures.

Signs of economic recovery were also seen in Asia. China’s consumer price index (CPI) rose 2.7% while its producer price index (PPI) also fell 2.4% in July from a year earlier, according to data from the National Bureau of Statistics released Monday.

Meanwhile, tensions between China and the U.S. continue to simmer after China imposed sanctions on 11 Americans on Monday, in response to the U.S.’ move on Friday sanctioning 11 Chinese officials and their allies in Hong Kong, including Hong Kong’s Chief Executive Carrie Lam.

COVID-19 cases also reached a grim milestone, with over 20 million cases reported as of August 11, according to Johns Hopkins University data. But New York, California and Texas reported falling numbers of hospitalizations.