PRECIOUS-Gold climbs over 1% on U.S. stimulus bets, dipping dollar

(Updates prices)
* Bank of England keeps stimulus programme unchanged
* U.S. weekly initial jobless claims rise further
* Dollar hovers near a two-and-a-half-year low
* Interactive graphic tracking global spread of coronavirus:
open
https://tmsnrt.rs/3aIRuz7 in an external browser

By Shreyansi Singh
Dec 17 (Reuters) - Gold prices rose over 1% to a one-month
peak on Thursday as the dollar spiralled lower on hopes of more
coronavirus relief aid and the U.S. Federal Reserve's pledge to
funnel more cash into the economy and keep interest rates low.
Spot gold XAU= jumped 1.1% to $1,885.37 per ounce at 2:13
p.m. EST (1913 GMT), having hit a one-month high of $1,895.81
earlier in the session. U.S. gold futures GCv1 settled up 1.7%
at $1,890.40.
"A combination of an additional stimulus package along with
additional bond buying and asset purchases from the Fed has
clearly driven gold and silver prices higher," said David Meger,
director of metals trading at High Ridge Futures.
An additional stimulus relief package is weighing on the
dollar due to more money being pumped into the supply, Meger
added.
Lawmakers sought to hammer out a $900 billion COVID-19 aid
bill with a Friday deadline to avert a government shutdown
looming, buoying gold prices and sending the dollar to a
multiyear trough. USD/ With interest rates anchored at zero, the Fed vowed to keep
pumping cash into financial markets until the U.S. economy's
recovery is secure. "The gold market seems to be solely focused on the fact that
there's a stimulus deal and that we're getting close to it,"
said Bob Haberkorn, senior market strategist at RJO Futures,
adding that the markets are expecting some progress by the
weekend.
Bullion, considered a hedge against inflation, has risen
over 24% so far this year amid the unprecedented stimulus
unleashed globally.
Raising concerns over the U.S. economy's recovery, the
number of Americans filing first-time claims for jobless
benefits unexpectedly rose last week as mounting COVID-19
infections battered business operations. The Bank of England kept its stimulus programme unchanged as
it awaited the outcome of Britain's trade deal talks with the
European Union. In other metals, silver XAG= rose 2.6% to $25.99 an ounce.
Platinum XPT= gained 0.8% to $1,042.76 and palladium XPD=
was up 0.2% at $2,331.39.