PRECIOUS-Gold surges 1.5% as dollar stumbles; silver gathers pace

* Silver surges over 6%; eyes best day in four months
* Palladium hits a near three-month high
* Platinum surges to over four-month peak
* Dollar drops to four-month low
* Gold will approach record highs over the next 18
months-poll

(Adds comments, updates prices)
By Nakul Iyer
July 21 (Reuters) - Gold soared to a nine-year peak on
Tuesday, boosted by a dollar sell-off and expectations for
increased stimulus to aid the recovery of pandemic-hit
economies, while silver dashed past the $20 threshold to an over
six-year high.
Spot gold XAU= rose 1.5% to $1,842.52 per ounce by 1:49
p.m. EDT (1749 GMT). It hit its highest since September 2011 and
was track to post its biggest daily gain since early May.
U.S. gold futures GCcv1 settled up 1.5% at $1,843.9.
"The U.S. dollar has dropped as the world is looking a
little bit better," said Bart Melek, head of commodity
strategies at TD Securities. "Interest rates have fallen across
the yield curve and that again is another factor helping gold,"
US/
The U.S. dollar .DXY , viewed as safe-haven rival to
bullion, hit more than a four-month low. USD/
U.S congressional leaders are set to discuss a fresh
stimulus package this week, and European Union leaders clinched
a "historic" deal on a massive stimulus plan on Tuesday morning.
Gold will push toward record highs over the next 18 months,
a Reuters poll showed, while low jewelry sales in Asia and the
prospect of economic recovery will hinder further gains.
PREC/POLL
"As economic uncertainty fades, demand for safe-haven assets
including gold should fall. However, this is only likely to take
a little shine off the gold price, as ultra-low real yields
remain a key support," Capital Economics economist James
O'Rourke wrote in a note.
In other metals, silver XAG= soared 6.4% to $21.18 per
ounce, after hitting its highest since July 2014 at $21.20.
"We're seeing both retail and institutional inflows into
Exchange Traded Products and that is helping buttress the
(silver) price," said Michael DiRienzo, executive director,
Silver Institute.
"The silver price is rising because of its duality as not
only a valuable investment but also as an industrial metal ...
interest in silver has risen to levels we have not seen in some
time."
Palladium XPD= climbed 5% to $2,156.71 per ounce, after
hitting a peak since April 21.
Platinum XPT= jumped 5.2% to $886.97 per ounce, after
rising to its highest since March 10.

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