PRECIOUS-Gold hits two-month peak as investors brace for U.S. Senate runoffs

* Dollar index holds close to 2-1/2 year low
* England enters new national lockdown
* Platinum, palladium demand from auto sector to improve
-analyst
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

(Updates prices)
By Asha Sistla
Jan 5 (Reuters) - Gold prices hit a two-month high on
Tuesday, lifted by a lacklustre dollar as investors awaited the
U.S. Senate runoffs in Georgia that will determine which party
controls Congress and prospects for additional fiscal stimulus.
Spot gold XAU= was up 0.3% at $1,948.80 an ounce by 1234
GMT, having touched its highest since Nov. 9 at $1,950.34. U.S.
gold futures GCv1 gained 0.3% to $1,952.20.
"Much will depend on the outcome of the runoff elections in
the state of Georgia in the U.S. and there are certainly hopes
among market participants that the Democrats are to win both
seats in the elections," said Commerzbank analyst Daniel
Briesemann.
"This would mean that the newly elected U.S. president Biden
can pursue his announced expansionary fiscal policy, which would
benefit gold."
A Democratic victory in Georgia could tip control of the
Senate away from Republicans. Underpinning gold, Britain went into a new national lockdown
to contain a surge in COVID-19 cases while New York registered
its first case of the more contagious coronavirus variant found
in the UK. The dollar index .DXY hovered close to April 2018 lows. A
weaker dollar makes bullion cheaper for buyers using other
currencies. USD/
In other precious metals, silver XAG= rose 0.6% to $27.38
and palladium XPD= gained 2.1% to $2,423.78.
Platinum XPT= was up 0.6% at $1,076.86, having hit a more
than four-year high of $1,127.82 on Monday.
Platinum and palladium are used by automakers in catalytic
converter manufacturing to clean car exhaust fumes.
"If you are looking at the PMIs released yesterday, they
have been positive for the manufacturing sector. So we get
indications that there is a strong demand from the automotive
sector," said Quantitative Commodity Research analyst Peter
Fertig, adding that this would increase the need for catalytic
converters and platinum group metals.