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Proved its worth for investors... after record moves in 2020, next year could see gold extend some of that. The Biden presidency should turn out to be another positive. Image Credit: Shutterstock

London: Gold is poised to cap the biggest annual advance in a decade after a tumultuous year, with gains this month aided by the dollar's decline to the lowest level since April 2018. Silver has surged almost 50 per cent in 2020.

Bullion hit a record in August as investors sought haven assets amid the pandemic. The surge was buttressed by unprecedented waves of stimulus, including from the US Federal Reserve, which fanned concerns of currency debasement.

Holdings in bullion-backed exchange-traded funds set an all-time high in October, although they've since ebbed with the roll-out of vaccines.

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Quite the upturn, for now

Gold for immediate delivery was 0.2 per cent higher at $1,897.67 an ounce at 10:18am in Singapore. That's up 6.8 per cent this month, and 25 per cent higher over 2020, poised for the biggest full-year advance since 2010.

Ahead of 2021, some banks have signaled that the traditional haven may now struggle to extend its gains. Gold and other precious metals will likely come under pressure next year as financial markets normalize and the yield curve steepens, Morgan Stanley said in a note earlier this month.

Others have struck a more positive tone. While bullion's rally has been blunted by vaccine progress, there's still support from monetary and fiscal policies, according to HSBC Securities (USA) Inc. A Joe Biden administration may be gold-positive from a fiscal-spending perspective, it said in a December 9 note.

Spot silver traded at $26.6448 an ounce, up 49 per cent this year. Palladium is on course for a fifth consecutive annual gain, with a rise of more than 20 per cent in 2020. Platinum has climbed 11 per cent.