Gold traded near an eight-week high as a surge in global coronavirus cases and curbs stoked demand for the haven, which has been supported by lower US real yields, a weaker dollar, and slumping equities.

Bullion has made a strong start to the new year, with the variant strain of the coronavirus first identified in the UK now found in New York State. UK Prime Minister Boris Johnson ordered a national lockdown in England starting from Monday night until mid-February. Global coronavirus infections climbed above 85 million, after daily cases in the US soared to a record of nearly 300 000.

Gold’s climb builds on the precious metal’s biggest annual gain in a decade, as virus angst clouds the outlook for the recovery. The spread of Covid-19 throughout the festive period and tighter restrictions will have a significant toll on the economy, albeit one that’s consigned mostly to the first quarter thanks to vaccines, according to Craig Erlam, senior market analyst at Oanda Corp.

“Gold burst through $1,900 to start the year, with a softer dollar giving the yellow metal the kick it craved,” said Erlam. Following its move toward $1,945, and with the outlook for the dollar looking no better, “another run at $2 000 suddenly looks a matter of time,” he said.

Spot gold climbed as much as 0.1% to $1,945.67 an ounce, the highest since Nov 9, and traded at $1 938.45 at 9:13 a.m. in Singapore. The metal surged 2.3% on Monday, the most in two months. Platinum declined 0.8% after hitting $1 131.62 an ounce on Monday, the highest since 2016. Silver also eased.

US real yields -- the difference between nominal benchmark bond yields and the rate of inflation -- were at -1.117% on Monday, while the Bloomberg Dollar Spot Index is near a 2018 low.

Traders were also tracking Tuesday’s runoff elections in Georgia and a rise in tensions in the Persian Gulf. The US contest will determine whether Democrats have control of Congress to push President-elect Joe Biden’s agenda. In the Middle East, Iran seized a South Korean-flagged oil tanker in the Strait of Hormuz hours before announcing it would increase its nuclear activities.