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PRECIOUS-Gold gains over 1% on hopes for U.S. stimulus

    * Dollar falls to a more than one-week low 
    * Gold hits highest level in more than a week
    * U.S. manufacturing activity unexpectedly slowed in Sept
    * Interactive graphic tracking global spread of coronavirus:
here

 (Updates prices)
    By Arundhati Sarkar
    Oct 1 (Reuters) - Gold jumped 1% on Thursday to firm above
the key $1,900 level on renewed hopes for U.S. stimulus that
could help ease the economic pain from the coronavirus, while a
weaker dollar also boosted bullion's appeal.
    Spot gold        rose 1.2% to $1,907.46 per ounce by 2 p.m.
EDT (1800 GMT), after hitting its highest level since Sept. 22
at $1,911.66.
    U.S. gold futures        settled up 1.1% at $1,916.30 per
ounce.
    Investors were eyeing talks between U.S. House of
Representatives Speaker Nancy Pelosi and Treasury Secretary
Steven Mnuchin to reach a deal on the long-awaited COVID-19
relief bill.                         
    "If there's a deal, chances are stimulus will reignite the
idea that inflation will move towards the Federal Reserve's
target," which along with the interest rate suppression policy
by the Fed is a very good catalyst for gold, said Bart Melek,
head of commodity strategies at TD Securities.
    He said the breakthrough of the psychological barrier of the
$1,900 level could drive the market technically a little higher.
    The dollar        fell to a more than one-week low versus
rivals, making gold cheaper for holders of other currencies.
      
    Meanwhile, U.S. manufacturing activity unexpectedly slowed
in September as new orders retreated, while U.S. weekly jobless
claims drifted lower but remained at recession levels, further
bolstering gold's safe-haven appeal.                         
    "The main driver (for gold) is investment money and reaction
to economic headlines, geopolitical headlines and the dollar,"
said David Govett, chief executive of Govett Precious Metals and
a former trader. "A lot of those things are factored in, but
it's going to get worse before it gets better, and because of
that gold is going to benefit and move back to $2,000." 
    Elsewhere, silver        gained 3% to $23.92 per ounce.
Platinum        was up 1.1% at $897.71 per ounce, while
palladium        rose 1% to $2,317.62. 

 (Reporting by Arundhati Sarkar and Nakul Iyer in Bengaluru;
editing by Jonathan Oatis and Leslie Adler)
  
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