Gold is set for 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.

Bullion hit a record in August as investors feared an unprecedented wave of stimulus by central banks and governments would lead to currency debasement and inflation. Holdings in bullion-backed exchange-traded funds set an all-time high in October.

While prices ebbed as the roll-out of vaccines injected optimism into financial markets, the dollar’s continued weakness has helped support gold into the year-end.

Looking ahead, there’s little consensus from Wall Street’s biggest names on bullion’s direction. Morgan Stanley sees gold and other precious metals coming under pressure as financial markets normalize and longer maturity bonds yields rise. Meanwhile, HSBC Holdings Plc sees gold climbing higher on continued uncertainty.

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Much of gold’s performance next year will depend on whether the eventual return to normality is outweighed by ongoing stimulative policies. Led by Chair Jerome Powell, the US Federal Reserve has signalled that its ultra-easy monetary conditions will last throughout 2021. Efforts to pass further fiscal stimulus through the Senate have hit another roadblock.

“Gold’s main drivers -- weaker US dollar and low real interest rates -- are likely to provide support” even as vaccines are distributed around the world, said Vasu Menon, executive director, investment strategy, at Singapore-based Oversea-Chinese Banking Corp. With the lower-for-longer Fed, “it is too early to throw in the towel on gold,” he said in an email.

Gold was little changed at US$1,894.95 ($2,509.39) an ounce at 10:04 a.m. in London. That’s up 6.6% this month, and 25% higher over 2020, poised for the biggest full-year advance since 2010. The Bloomberg Dollar Spot Index is heading for a third straight quarterly loss.

Spot silver traded at US$26.4661 an ounce, up 48% this year. Palladium is on course for a fifth consecutive annual gain, with a rise of more than 20% in 2020. Platinum has climbed 11%.