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PRECIOUS-Gold hits 2-month high as dollar sags; platinum rallies

PUBLISHED: Mon, 04 Jan 2021 15:34:31 GMT

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(New throughout, adds comments, updates prices) * Dollar slips to multi-year lows * Platinum hits highest since August 2016 * Silver hits over three-month peak * Silver set to shine in 2021 * Interactive graphic tracking global spread of coronavirus: https://tmsnrt.rs/3mvcUoa By Shreyansi Singh Jan 4 (Reuters) – Gold prices rose more than 2% to their highest in nearly two months on Monday, bolstered by the dollar’s slide ahead of Georgia runoff elections, while supply concerns drove platinum to its highest since August 2016. Spot gold was up 2.3% at $1,942.05 an ounce by 10:06 a.m. EST (1506 GMT), having risen as much as 2.5% to its highest since Nov. 9 at $1,944.11. U.S. gold futures advanced by 2.7% to $1,946.90. “There is the likelihood that we will see significant stimulus, which will lead to further declines in the dollar,” said Jeffrey Sica, founder of Circle Squared Alternative Investments. The dollar index slid to a 2-1/2 year low, making bullion cheaper for holders of other currencies. Tuesday’s run-off elections in the U.S. state of Georgia, which will decide which party controls the Senate, were on investors’ radar. “The Senate election this week could turn out to be a major disruptive event so gold is rallying on that,” Sica added. A unified government would increase Biden’s ability to reshape the world’s largest economy, from rewriting the tax code to boosting stimulus and infrastructure spending. Non-yielding bullion is considered a hedge against inflation and currency debasement likely to result from large stimulus measures. Tougher lockdown restrictions are expected in Britain and Japan, as novel coronavirus cases mount. The 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. Platinum jumped 5.4% to $1,125.52 after hitting its highest since August 2016 at $1,127.82. Silver gained 4.2% to $27.48 an ounce, touching its highest since Sept. 15, 2020 earlier, while palladium dipped by 0.1% to $2,445.11. (Reporting by Shreyansi Singh and Asha Sista in Bengaluru; editing by Barbara Lewis)

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