Gold prices notched their biggest gain in nearly three months Thursday, boosted by a weaker dollar and a holiday-thinned market.

Gold for February delivery closed up 1.5% at $1,158.10 a troy ounce on the Comex division of the New York Mercantile Exchange, the biggest gain since November 2. It was the highest level for gold prices since Dec. 14.

The WSJ Dollar Index, which weighs the dollar against a basket of other currencies, was down 0.5% at 93.07. A weaker dollar is typically bullish for gold, making it more affordable for investors who hold other currencies. Volume was sparse, helping to exaggerate some market moves, investors said.

Prices are also being boosted by investors covering their bets against the precious metal after a big decline from the highs of the summer, as well as bargain hunters who believe further downside in gold is limited, analysts at Kitco Metals said in a note to investors.

Gold prices are down around 16% from their year highs, reached in July.

Traders are awaiting signals for gold in the new year, including the speed of rate increases by the Federal Reserve and the potential impact of policies touted by president-elect Donald Trump, which could stoke inflation.

Several European elections, including in France and Germany, could boost populist parties and increase political uncertainty, which some analysts say could be bullish for the precious metal.

Silver for March closed up 1.1% at $16.21 a troy ounce, April platinum was unchanged at $902.40 a troy ounce, and March palladium was up 1.3% at $675.65 a troy ounce

(WSJ)