Gold set for best year in a decade with 24% rise

Gold prices fell on Thursday as hopes for an economic recovery next year increased risk appetite, although the precious metal was set to wrap up the year with its best performance in a decade.

Spot gold fell 0.2% to $1,889.58 per ounce by 0353 GMT. but was up more than 24% for the year.

US gold futures were little changed at $1,892.90.

Asian shares were set to end the year at record highs as investors pinned hopes on a swift economic recovery next year, also pressuring the dollar.

"The dollar is going to weaken quite precipitously until Q1, giving gold a clear runaway to do well right out of the gates next year," Stephen Innes, chief global market strategist at Axi, said, adding that inflation remained key to gold's trajectory.

Boosting hopes for a faster economic recovery next year, Britain on Wednesday approved Oxford University and AstraZeneca's vaccine to combat a fast-spreading coronavirus variant.

Also weighing on bullion was Republican Senate Majority leader Mitch McConnell's refusal for a quick vote on a bill to increase US relief checks to $2,000, saying it had "no realistic path to quickly pass the Senate."

Unprecedented stimulus measures and low-interest rates to cushion economies from the pandemic's blow this year have benefited gold as it is seen as a hedge against inflation.

Silver fell 0.9% to $26.38 per ounce but was up more than 48% this year - its best performance since 2010.

Platinum dropped 0.5% to $1,060.18 per ounce but was up 10% in 2020. Palladium rose 0.3% to $2,368.68 per ounce and was on track for a fifth straight year of gains with a 22% rise.