Gold surged above $1 900/OZ as lower US real yields and a weaker dollar helped the precious metal build on its biggest annual advance in a decade.

Bullion climbed to the highest level in almost two months after renewed declines in real yields boosted gold’s allure. Real yields -- the difference between nominal benchmark bond yields and the rate of inflation -- were at -1.092% on Friday, near last year’s nadir. The figure ticked up on Monday. The decline in real rates is being driven by a rise in inflation expectations, with investors betting that vaccine distribution, further central bank support, and continuing government aid will see demand rebound in 2021.

“Investors are looking for assets which benefit from higher inflation,” said Giovanni Staunovo, an analyst at UBS Group. “The reflation element is also supporting gold today.”

Bullion is also rallying as a gauge of the US currency languishes at the lowest level since 2018 after sliding for three quarters. The gains in the haven come even as US and global stocks are at all-time highs amid expectations that measures to combat the pandemic will reignite growth and boost corporate profits. Gold is also being supported by renewed inflows into exchange-traded funds, following withdrawals in November and the first weeks of December.

Spot gold climbed as much as 1.9% to $1 935.30/oz, the highest since Nov 9, and traded at $1 932.69 at 10:02 a.m. in London. The Bloomberg Dollar Spot Index fell 0.5%. In 2020, the precious metal rose 25%. Silver rose as much as 3.6%, and platinum hit $1 112.05/oz, the highest since 2016.

Bitcoin declined 8%, a day after climbing to a record above $34 000, as the crypto rally took a breather. Proponents of the world’s largest cryptocurrency argue that it’s muscling in on gold as a hedge against dollar weakness and inflation risk, citing evidence of growing interest among institutional investors.

In US politics, the state of Georgia holds a run-off election Tuesday for two US Senate seats that will determine control of the chamber, while Congress meets on Wednesday to count electoral votes and declare the winner of the 2020 presidential election. A Democrat sweep of the Senate and Presidency could support gold, as the Joe Biden administration boosts stimulus and ups spending on the post-virus reconstruction.