(Updates prices)
* Dollar hits more than two-year low
* Silver rises to three-week high
* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser
By Diptendu Lahiri
Sept 1 (Reuters) - Gold prices jumped more than 1% on Tuesday to a near two-week high, following the steepest fall in the dollar in more than two years as investors bet on U.S. interest rates staying lower for longer.
Spot gold XAU= was up 1% to $1,989.78 per ounce by 1203 GMT, having earlier hit its highest since Aug. 19 at $1,991.91. U.S. gold futures GCcv1 also rose nearly 1% to $1,997.30.
"The two drivers for gold are the weaker dollar and lower yields and that will keep the metal moving between the range of $1,800 and $2,100 until the U.S. presidential elections in November," said Robin Bhar, an independent analyst.
"However, at the end of every month we might see some corrections as a result of speculators selling their positions."
The dollar index .DXY dropped to a more than two-year low, making gold cheaper for holders of other currencies. USD/
The U.S. Federal Reserve's new monetary policy plan, which may lead to inflation rising marginally and long-term interest rates staying lower, also weighed on U.S. Treasury yields. interest rates minimise the opportunity cost of owning non-yielding bullion, which is often used as a buffer against inflation and currency depreciation.
Gold has gained about 31% this year, also supported by economic uncertainty stemming from the coronavirus pandemic.
While waning consumer demand remains a headwind, "strong investor demand is likely to continue to provide support for gold," Heraeus Precious Metals said in a note.
"In the near term, gold could move sideways as it consolidates following its rapid rally to record highs in early August."
Elsewhere, silver XAG= was up 2% to $28.79 per ounce, after hitting its highest since Aug. 11.
Platinum XPT= rose 2.5% to $952.86 and palladium XPD= climbed 1.7 % to $2,280.47.