NEW YORK: Gold slipped on Thursday weighed down by a stronger dollar and higher US Treasury yields, but prospects of more fiscal stimulus under a Democrat-led administration in Washington capped losses.

Spot gold fell 0.4% to $1,910.71 per ounce by 12:33 p.m. EST (1733 GMT). US gold futures were up 0.2% at $1,911.40.

Prices slipped as much as 2.5% after scaling their highest since Nov. 9 on Wednesday, as 10-year US Treasury yields jumped above 1% for the first time since March.

The higher treasury yields are pulling some “flight to safety money out of the gold market,” said Bob Haberkorn, senior market strategist at RJO Futures.

But while the stronger dollar is weighing on gold, the greenback’s upside is likely to be “short lived,” he added.

The dollar index rebounded from a multi-year low, making bullion less attractive for other currency holders.

A Democrat victory in the US Senate runoffs stoked inflation expectations as investors raised bets for more fiscal stimulus, while the US Congress certified President-elect Joe Biden’s win.

“The double Democratic win in Georgia increases expectations of larger stimulus support and higher infrastructure spending,” Standard Chartered Analyst Suki Cooper said, adding the resultant higher inflation expectations would support upward momentum in gold.

On the technical front, gold is no longer in ‘overbought’ territory and $1,965 an ounce is a key resistance level, she said, with near term support around $1,894.

The non-yielding metal is considered a hedge against inflation and currency debasement likely to be spurred by widespread stimulus measures.

“There’s going to be more downside for the dollar, and that’s also going to be bullish for the metals,” said Kitco Metals senior analyst Jim Wyckoff.

Silver fell 1% to $27.02 an ounce. Platinum rose 0.8% to $1,110.33, and palladium slipped 1.2% to $2,408.69.