Gold jumps over 2pc in New York

• Platinum hits highest since August 2016

• Silver hits over three-month peak

• Silver set to shine in 2021

NEW YORK: Gold prices rose more than 2% on Monday to their highest in nearly two months, bolstered by the dollar's slide ahead of runoff elections for both US Senate seats from Georgia, while supply concerns drove platinum to its highest since August 2016.

Spot gold was up 2.1% at $1,937.06 an ounce by 12:14 p.m. EST (1714 GMT). The session high of $1,944.11 was its highest since Nov. 9. US gold futures advanced by 2.6% to $1,944.60.

"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.

Investors were watching Tuesday's run-off elections in Georgia, which will decide which party controls the US Senate.

"The Senate election this week could turn out to be a major disruptive event so gold is rallying on that," Sica added.

If President-elect Joe Biden's Democrats gain control of both houses of the US Congress, his administration would find it easier to push policies such as rewriting the tax code to boosting stimulus and infrastructure spending.

Many investors view non-yielding bullion as a hedge against inflation and currency debasement that they fear could result from large stimulus measures.

Tougher lockdown restrictions are expected in Britain and Japan, as COVID-19 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 rose 0.1% to $1,068.99 after hitting its highest since August 2016 at $1,127.82 earlier.

Silver gained 2.5% to $27.01 an ounce, touching its highest since Sept. 15, 2020 earlier, while palladium dipped by 3.2% to $2,369.02.