Gold prices sank

Gold sank on Tuesday after rising more than 2% in the previous session, while market participants awaited runoff elections for both U.S. Senate seats from Georgia that would determine the future course of fiscal support.

Spot gold was down 0.2% to $1,938.16 per ounce by 0045 GMT, after hitting its highest since Nov. 9 at $1,945.26 earlier in the session, while U.S. gold futures inched down 0.1% to $1,944.30.

The Georgia runoff elections will decide which party controls the U.S. Senate. A win by Democrats would make it easier for President-elect Joe Biden to push policies such as rewriting the tax code to boosting stimulus.

Gold is considered a hedge against inflation and currency debasement.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.5% to 1,187.95 tonnes on Monday.

Speculators cut bullish positions in COMEX gold and silver contracts in the week to Dec. 29, data showed on Monday.

Silver shed 0.3% to $27.12 an ounce. Platinum fell 0.5% to $1,064.29, while palladium gained 0.2% at $2,377.05.