PRECIOUS-Gold begins 2021 with 2% jump as dollar falters

(Adds analyst comment, updates prices)
* Dollar slips to multi-year lows
* Platinum hits highest since August 2016, silver at
two-week high
* Silver set to shine in 2021 * Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

By Asha Sistla
Jan 4 (Reuters) - 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 XAU= 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. U.S. gold futures GCv1 advanced by 2.1% to
$1,935.60.
"Since gold reversed course from below $1,900, this is
mainly a reflection of a weaker U.S. 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. .EU
The dollar index .DXY tumbled to a 2-1/2 year low, making
gold cheaper for other currency holders. USD/
Investors are awaiting Tuesday's run-off elections in the
U.S. 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
U.S. 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 XAG= gained 3.1% to
$27.16 an ounce, touching its highest since Dec. 21, while
palladium XPD= dipped by 0.1% to $2,446.24.
Platinum XPT= jumped 3.2% to $1,102.43 after hitting its
highest since August 2016 at $1,110.