(Reuters) - Gold rose more than 1% to a nine-year high on Tuesday, propelled by a softer dollar and expectations of more stimulus measures to resuscitate pandemic-hit economies, while silver sprinted past $20 for the first time since September 2016.
Spot gold gained 1.1% to $1,834.80 an ounce by 1217 GMT, having touched $1,841.01 for its highest since September 2011. U.S. gold futures rose 0.8% to $1,831.60.
“Gold is deriving strength from a broadly weaker dollar despite the improving market mood,” said FXTM analyst Lukman Otunuga.
“The fundamental themes weighing on global sentiment remain intact, with rising coronavirus cases in the largest economy in the world fostering a sense of unease.”
The dollar eased 0.1% against major currencies after touching a more than four-month low.
Gold’s advance defied a gain in global equities on the European Union’s 750 billion euro ($857 billion) stimulus plan and hopes for coronavirus vaccines.
Gold is finding support from discussions about new fiscal stimulus, said UBS analyst Giovanni Staunovo.
Widespread stimulus tends to support gold because the metal is widely viewed as a hedge against rising prices and currency debasement. Analysts, however, remain divided on the outlook for inflation.
In the United States, too, congressional Republicans announced plans to seek a further $1 trillion in economic relief.
A surge in coronavirus cases in the United States and globally have stoked doubts about economic recovery, helping gold to gain about 20% this year.
Silver surged 5.2% to $20.94 an ounce after reaching its highest since July 2016 at $21.04.
“Silver is starting to outperform gold here,” said IG Markets analyst Kyle Rodda, pointing to increased appeal for precious metals generally.
“On top of that, there’s likely to be an element of silver catching a bit on a rebound in global industrial activity,” she added.
Palladium jumped 3.5% to $2,125.78 an ounce after touching its highest since April 21.
Platinum rose 2.1% to $861, having earlier touched its highest since March 11.
Reporting by Eileen Soreng and Brijesh Patel and in Bengaluru; Additional reporting by K. Sathya Narayanan; Editing by Barbara Lewis and David Goodman
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