(Adds graphic, updates prices) * Silver slips after hitting more than 3-month high * Dollar hits over one-week high, off multi-year lows * European shares fall as new coronavirus strain shuts Britain * Interactive graphic tracking global spread of coronavirus: tmsnrt.rs/3mvcUoa By Asha Sistla Dec 21 (Reuters) - Gold prices erased early gains to fall by as much as 1.3% on Monday, under pressure from an advancing dollar as fears of a new coronavirus strain roiled markets and forced tougher restrictions. Spot gold fell 0.4% to $1,873.06 per ounce by 1317 GMT, having earlier hit its highest since Nov. 9 at $1,906.46. U.S. gold futures were down 0.2% to $1,884.80. "Broadly it is a risk-off sentiment. The forex and equities markets are down. The new variant of the virus has sparked renewed uncertainty in the market and we are seeing a drastic risk aversion," said Bank of China International analyst Xiao Fu. "Though, gold should gain in these cases as a safe-haven asset, but generally, during these situations we see the dollar stealing the show." The dollar index gained as much as 1% and rebounded off multi-year lows to a more than one-week high as news of a mutant coronavirus strain caused a dip in the pound and euro. European equities also fell in response to stringent lockdowns in Britain that sowed chaos for families and companies just days before it exits the European Union's orbit. Prices earlier in the session jumped more than 1% on reports that U.S. congressional leaders on Sunday reached agreement on a $900 billion package to aid the virus-stricken U.S. economy. "The U.S. fiscal package is supporting inflation expectations. As a result, the yield of the 10-year U.S. Tips has fallen the lowest level since September. Falling real rates are positive for gold," said UBS analyst Giovanni Staunovo. In other metals, silver was down 0.6% to $25.62 an ounce, having hit its highest since Sept. 16 at $27.38 earlier in the session, palladium fell 2.5% to $2,302.57 and platinum dipped 5.3% to $980.69. "With Europe being hit again by mobility restrictions, the platinum market might suffer as well as it is strongly exposed to Europe, so risk off and with the weakest fundamentals, the metal is suffering," added UBS' Staunovo. (Reporting by Asha Sistla and Diptendu Lahiri in Bengaluru; editing by Barbara Lewis and David Evans)
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