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Gold rises 1% as softer dollar, stimulus bets fuel record run

Tuesday,   28-Jul-2020   09:02 AM (IST)

Gold jumped more than 1% to a fresh record on Tuesday, as a weaker U.S. dollar and hopes of more stimulus measures to combat the economic blow from the pandemic drove investors towards the safe-haven metal. Spot gold was up 1.1% at $1,963.91 per ounce by 0030 GMT after hitting a record high at $1,966.76 in early Asian trade. U.S. gold futures climbed 1.4% to $1,958.80. The dollar index  fell 0.1% to hold near a two-year low hit in the previous session, making gold less expensive for holders of other currencies. Asian nations imposed new restrictions, while an abrupt British quarantine on travellers from Spain threw Europe's summer reopening into disarray, as the world confronted the prospect of a second wave of COVID-19 infections. Hopes for a quick economic recovery are fading as coronavirus infections showed few signs of slowing. More than 16.35 million people have been reported to be infected by the novel coronavirus globally and 649,225​ have died, according to a Reuters tally. Senate Republicans on Monday proposed a $1 trillion coronavirus aid package hammered out with the White House, paving the way for talks with Democrats on how to help Americans as expanded unemployment benefits for millions of workers expire this week.  Gold tends to benefit from widespread stimulus measures by central banks because it is widely viewed as a hedge against inflation and currency debasement. Meanwhile, China took over the premises of the U.S. consulate in the southwestern city of Chengdu on Monday, after ordering the facility to be vacated in retaliation for China's ouster last week from its consulate in Houston, Texas. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.5% to 1,234.65 tonnes on Monday. Silver jumped 3.7% to $25.52 per ounce, platinum rose 0.5% to $950.41 and palladium  gained 0.3% to $2,318.43.