Gold begins 2021 with 2pc jump as dollar falters
- Dollar slips to multi-year lows.
- Platinum hits highest since August 2016, silver at two-week high.
- Silver set to shine in 2021.
Gold began the new year by climbing 2% on Monday, closing in on its highest in nearly two months as the dollar slid to 2018 lows and prospects of tougher restrictions to combat a new variant of the coronavirus kept safe-haven bullion in demand.
Spot gold was up 1.7% at $1,930.20 an ounce by 1255 GMT, having risen as much as 2% to its highest since Nov. 9 at $1,936.31. US gold futures advanced by 2.1% to $1,935.60.
"Since gold reversed course from below $1,900, this is mainly a reflection of a weaker US dollar ... a very fertile backdrop for gold and based on that we've also seen some trend followers and technical traders coming back into the market, extending this rally," said Julius Baer analyst Carsten Menke.
Although potentially stricter curbs in Britain and Japan have not dampened risk appetite, bullion remains supported by the clampdowns, Menke added.
The dollar index tumbled to a 2-1/2 year low, making gold cheaper for other currency holders.
Investors are awaiting Tuesday's run-off elections in the US state of Georgia, which will decide which party controls the Senate.
"The chances of the Democrats winning both seats have increased of late. This would make it easier for newly elected US President Biden to push through his planned expansionary fiscal policy," Commerzbank said in a note.
Non-yielding bullion is seen as a hedge against the inflation that is likely to result from record fiscal stimulus.
The new coronavirus variant in South Africa is likely to have an impact on precious metals prices, said StoneX analyst Rhona O'Connell.
"The ban on flights out of South Africa is going to hit precious metals exports - certainly gold, platinum and palladium... which are transported by air, and the majority of that is on passenger flights," she said.
In other precious metals, silver gained 3.1% to $27.16 an ounce, touching its highest since Dec. 21, while palladium dipped by 0.1% to $2,446.24.
Platinum jumped 3.2% to $1,102.43 after hitting its highest since August 2016 at $1,110.
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