* U.S. shares sharply decrease in afternoon buying and selling

* Gold costs rally

* U.S. bond costs fall (Updates with closing oil costs)

NEW YORK, Jan 4 (Reuters) – U.S. shares dropped greater than 1% on Monday, the primary buying and selling day of the brand new yr, pulling again after current positive aspects to document highs, whereas the U.S. greenback was up barely.

Shares hit document highs early within the session as buyers targeted on the rollout of COVID-19 vaccines, however sentiment rapidly turned cautious over the trail of the virus, which continues to unfold amid the invention of a brand new variant.

The result of runoff elections on Tuesday in Georgia for 2 U.S. Senate seats added to the nervousness.

“Buyers are feeling a bit nervous on the primary buying and selling day of the brand new yr, and I believe this can be a confluence of things,” stated Lindsey Bell, chief funding strategist at Ally Make investments, in Charlotte, North Carolina.

MSCI’s All-Nation World Index, which tracks shares throughout 49 international locations, was down 0.7% after earlier hitting a document excessive.

The Dow Jones Industrial Common fell 492 factors, or 1.61%, to 30,114.48, the S&P 500 misplaced 64.89 factors, or 1.73%, to three,691.18 and the Nasdaq Composite dropped 210.31 factors, or 1.63%, to 12,677.98.

The pan-European STOXX 600 index rose 0.67%, whereas Britain’s FTSE 100 index closed up 1.7% on its first post-Brexit buying and selling day.

Britain started vaccinating its inhabitants with the COVID-19 shot developed by Oxford College and AstraZeneca on Monday.

With the lag between a full vaccine rollout and a worldwide financial restoration, buyers will rely on central banks to maintain cash low-cost.

Minutes of the Federal Reserve’s Dec. 15-16 coverage assembly are due on Wednesday and may provide extra particulars on discussions about making the U.S. central financial institution’s ahead coverage steerage extra express and the possibility of an additional enhance in asset purchases this yr.

Friday brings the U.S. employment report for December.

In currencies, the U.S. greenback recovered after falling to its lowest stage since April 2018.

The greenback index rose 0.169%, with the euro up 0.88% to $1.2244.

The Japanese yen strengthened 0.08% versus the buck to 103.12 per greenback, whereas Sterling was final buying and selling at $1.3556, down 0.84% on the day.

Gold costs had been up greater than 2%, whereas U.S. crude futures fell 1.9% to settle at $47.62 a barrel and Brent futures dropped 1.4% to $51.09.

U.S. Treasury yields edged greater as merchants repositioned at first of buying and selling within the new yr. Benchmark 10-year Treasury notes final fell 1/32 in worth to yield 0.9148%.