PRECIOUS-Gold surges 1.5% as dollar stumbles; silver gathers pace

* Silver surges over 6%; eyes best day in four months

* Palladium hits a near three-month high

* Platinum surges to over four-month peak

* Dollar drops to four-month low

* Gold will approach record highs over the next 18 months-poll (Adds comments, updates prices)

July 21 (Reuters) - Gold soared to a nine-year peak on Tuesday, boosted by a dollar sell-off and expectations for increased stimulus to aid the recovery of pandemic-hit economies, while silver dashed past the $20 threshold to an over six-year high.

Spot gold rose 1.5% to $1,842.52 per ounce by 1:49 p.m. EDT (1749 GMT). It hit its highest since September 2011 and was track to post its biggest daily gain since early May.

U.S. gold futures settled up 1.5% at $1,843.9.

“The U.S. dollar has dropped as the world is looking a little bit better,” said Bart Melek, head of commodity strategies at TD Securities. “Interest rates have fallen across the yield curve and that again is another factor helping gold,”

The U.S. dollar, viewed as safe-haven rival to bullion, hit more than a four-month low.

U.S congressional leaders are set to discuss a fresh stimulus package this week, and European Union leaders clinched a “historic” deal on a massive stimulus plan on Tuesday morning.

Gold will push toward record highs over the next 18 months, a Reuters poll showed, while low jewelry sales in Asia and the prospect of economic recovery will hinder further gains.

“As economic uncertainty fades, demand for safe-haven assets including gold should fall. However, this is only likely to take a little shine off the gold price, as ultra-low real yields remain a key support,” Capital Economics economist James O’Rourke wrote in a note.

In other metals, silver soared 6.4% to $21.18 per ounce, after hitting its highest since July 2014 at $21.20.

“We’re seeing both retail and institutional inflows into Exchange Traded Products and that is helping buttress the (silver) price,” said Michael DiRienzo, executive director, Silver Institute.

“The silver price is rising because of its duality as not only a valuable investment but also as an industrial metal ... interest in silver has risen to levels we have not seen in some time.”

Palladium climbed 5% to $2,156.71 per ounce, after hitting a peak since April 21.

Platinum jumped 5.2% to $886.97 per ounce, after rising to its highest since March 10.

Reporting by Nakul Iyer and Swati Verma in Bengaluru; Editing by Steve and Richard Chang