Gold prices rose on Tuesday, extending gains for the fifth straight day, and hit a 2-month high, as the US dollar fell against a basket of major currencies, amid growing safe-haven demand.

Gold prices rose 0.3% to the highest since November 9 at $1,948.41 an ounce, after opening at $1,943.06 and hitting a low of $1,934.28.

The yellow metal gained 2.5% yesterday, and posted the fourth straight daily gain, starting 2021 with the largest daily gain since November 5, thanks to falling dollar.

The US dollar index fell by 0.3% against a basket of major currencies today, and hit its 33-month low at 89.42 points.

The greenback's drop came as demand for the US currency slowed due to strong risk appetite after the People's Bank of China lifted the official exchange rate for the yuan to the highest rate since China abandoned its peg against the dollar in 2005.

Gold prices are also being lifted due to renewed concerns about the second wave of the coronavirus after Britain announced a general lockdown for the third time to curb the spread of the new Covid-19 variant.

Gold stocks at the SPDR ETF rose 17.21 metric tonnes yesterday, the largest daily increase since September 21, with the total at the highest level since December 3 at 1,187.95 MT.

European stocks fell on Tuesday, and pulled back from the 11-month high that was hit yesterday due to profit-taking, after the US stocks record rally paused.

The Stoxx Europe 600 index fell 0.3% as of 11:41 GMT, after it closed higher by 0.7% yesterday and hit the highest since February 405.74 points.

The pan European index opened lower today, the second session of 2021, and pulled back from 11-month high with most of the major European markets and sectors seeing red.

The utilities sector saw the largest losses in Europe today, falling more than 1%, while the energy sector marched in the opposite direction after oil prices rose.

Alongside profit-taking, European stocks fell after the US stocks record rally paused, in addition to concerns about the second wave of the coronavirus after Britain announced a general lockdown for the third time to curb the spread of the new Covid-19 variant.

 S&P 500 futures fell 0.75%, after the index closed lower by 1.5% yesterday at Wall Street on profit-taking from the record high of 3,769.99 points.

Back to Europe, the Euro Stoxx 50 index fell 0.4%, France's CAC 40 fell 0.4%, Germany's DAX fell 0.35%, and the UK's FTSE 100 slipped less than 0.1%.

Oil prices rose on Tuesday, to resume gains after a pause yesterday due to profit-taking, before the OPEC-Plus meeting concludes, as the global coalition is expected to keep the current output levels during February as Saudi Arabia continues to push forward in that direction.

US crude rose 1.35% to $ 48.03 a barrel, after opening at $47.39, and hit a low of $47.27, and Brent crude rose 1.4% to $51.46 a barrel, after opening at $50.74, and hit a low of $50.62.

US crude lost 1.75% yesterday, and posted its first loss in 4 days, due profit-taking from an 11-month high of $49.80.

Brent crude futures fell nearly 1.9%, after hitting the highest since March 2020 at $53.30.

Alongside profit-taking, oil prices fell on Monday after OPEC-Plus failed to agree on output levels in February, in addition to the United Kingdom's announcement of a general lockdown to curb the spread of the new Covid-19 variant.

During the monthly meeting of the OPEC-Plus joint ministerial committee, which is held to review members' compliance with the global production cut agreement, Saudi Arabia opposed increasing production due to the new lockdowns, while Russia called for a hike after the recent recovery of demand.

The meeting will conclude later today, after it was extended due to the failure to reach an agreement yesterday, amid expectations that Saudi Arabia and Russia will dismiss any proposed hikes in production.

OPEC-Plus agreed on early December to increase output by 500,000 barrels per day starting from January 2021, and agreed to hold a monthly ministerial meeting to review the market situation and adjust production levels accordingly.

Sterling fell in European trade against the dollar for another session away from 2-1/5 year highs on profit-taking and after the UK government announced another shutdown to contain the spread of the coronavirus. 

GBP/USD fell 0.1% to 1.3553, after closing down 0.7% yesterday, the first loss in four days on profit-taking away from 2-1/5 year highs.

UK Prime Minister Boris Johnson announced the third complete shutdown until mid February, with potential to extend. 

Johnson said the new Covid 19 strain is spreading extremely faster, with nearly 70% more spread than the usual strain.

Experts expect the next few weeks to be the worst in dealing with the new strain, while vaccination efforts start to build up quickly.