Gold prices hit a two-month high on Tuesday, lifted by a lacklustre dollar as investors awaited the US Senate runoffs in Georgia that will determine which party controls Congress and prospects of additional fiscal stimulus.
Spot gold was up 0.12 per cent to $1,946.52 per ounce by 9.16 pm IST, after hitting its highest since November 9 at $1,947.96.
"Much will depend on the outcome of the runoff elections in the state of Georgia in the US and there are certainly hopes among market participants that the Democrats are to win both seats in the elections," Commerzbank analyst Daniel Briesemann said.
"This would mean that the newly elected US president Biden can pursue his announced expansionary fiscal policy, which would benefit gold."
The dual runoff elections in Georgia will decide which party controls the US Senate and influence future fiscal policies.
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 variant of the coronavirus found in the UK.
The dollar index hovered close to April 2018 lows, making bullion cheaper.
In other metals, silver rose 0.7 per cent to $27.40 and palladium gained 0.8 per cent to $2,392.23.
Platinum was up 0.2 per cent to $1,071.62, having hit a more than four-year high of $1,127.82 on Monday.