SINGAPORE: Gold held near its highest in nearly two months on in Asian trade on Wednesday, supported by a softer dollar as investors awaited a verdict from the US Senate run-off election in Georgia.

Spot gold rose 0.1% to $1,951.31 per ounce by 0835 GMT, having hit a nearly two-month peak of $1,954.97 earlier in the session. US gold futures eased 0.1% to $1,952.80.

“The market is very reactive to the polls and liquidity is pretty thin. (But) It will hoover up dips in gold regardless of who wins because the general view right now is reflation trade,” said Axi chief global market strategist Stephen Innes.

Gold could still reach $2,000 by the month-end, Innes added.

Investors consider it a hedge against possible inflation that could result from the stimulus.

A weaker dollar also makes dollar-denominated commodities cheaper for other currency holders.

Capping gold’s gains, US 10-year Treasury yields hit their highest since March.

Higher bond yields increase the opportunity cost of holding non-interest bearing gold.

“We continue to be positive on gold. The macro backdrop that supported gold last year extends into this year and key drivers such as portfolio diversification into gold should have room to extend this year, so that should continue to support prices,” UBS strategist Joni Teves said.—Reuters