Gold extends gains on hopes of US stimulus package

Gold rose for a third straight session on Wednesday, hitting its highest in about two weeks, as positive rhetoric from US lawmakers regarding a stimulus bill to cushion the economic damage from the coronavirus outbreak lifted investor sentiment.

FUNDAMENTALS
Spot gold was up 0.9 per cent at $1,624.18 per ounce by 0038 GMT, after rising as much as 1.6 per cent to $1,635.79 earlier in the day - its highest since March 12. The metal jumped more than 3 per cent in the previous session.

US gold futures climbed 1.6 per cent to $1,687.30.


Senior US Democrats and Republicans said on Tuesday they were close to a deal on a $2 trillion stimulus package to limit the pandemic's economic toll.

Asian shares extended their rally in the wake of Wall Street's big gains as US Congress appeared closer to passing the stimulus package.

The United States could become the global epicentre of the virus, the World Health Organization said, as India announced a full 24-hour, nationwide lockdown in the world's second-most populous country.

Fatalities in Italy have surged in the last 24 hours, the Civil Protection Agency said on Tuesday, dashing hopes the epidemic in the world's worst-hit country was easing after more encouraging numbers in the previous two days.

The virus had infected more than 395,500 people across the world, as of Tuesday.

Business activity collapsed from Australia, Japan and Western Europe to the United States at a record pace in March as measures to contain the epidemic hammer the world economy, cementing economists' views of a deep global recession.

London spot gold prices were far below US gold futures on Tuesday in a sign the market is worried air travel restrictions and precious metal refinery closures will hamper shipments of bullion to the United States to meet contractual requirements.

SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings rose 1.3 per cent to 935.98 tonnes on Tuesday.

Palladium climbed 1.3 per cent to $1,958 an ounce and platinum gained 3 per cent to $729.49. Both the metals rose more than 10 per cent in the previous session as major producer South Africa was locked down due to the virus.

Silver rose 1.6 per cent to $14.49 per ounce.