PRECIOUS-Gold hits two-week peak on U.S. stimulus bets

(Updates prices)
* Gold hits highest since Nov. 23
* Dollar re-strengthening is downside risk for gold- analyst
* California imposes new COVID-19 restrictions
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

By Nakul Iyer
Dec 8 (Reuters) - Gold prices touched a two-week high on
Tuesday as investors pinned hopes on a U.S. fiscal stimulus deal
to cushion the economic blow from surging coronavirus
infections.
Spot gold XAU= rose 0.1% to $1,864.74 per ounce by 0725
GMT, having touched its highest since Nov. 23 of $1,871.52
earlier in the session.
U.S. gold futures GCv1 were up 0.2% to $1,869.70.
"Markets more or less are pricing in that a deal will get
done ... It's going to be about how large that package happens
to be, how soon it comes and how that manifests in inflation
expectations going forward," said IG Markets analyst Kyle Rodda.
Rodda, however, warned that a re-strengthening of the dollar
likely to be caused by stalled U.S. stimulus talks or Brexit
uncertainty posed a risk to gold prices.
The U.S. Congress will vote this week on a stopgap funding
bill to provide more time to reach a deal on COVID-19 relief,
while U.S. Senate Democratic leader Chuck Schumer said there
were signs of progress in talks on a bipartisan bill.
The imposition of stricter lockdowns to control soaring
infections has highlighted the need for more stimulus, with
California announcing fresh restrictions on Monday and New York
weighing a ban on indoor dining. The size of the current U.S. stimulus package remains below
market expectations so it may not drive gold prices further,
said Margaret Yang, a strategist at DailyFX.
If gold fails to break a resistance at $1,870, there may be
another pullback with support at $1,800, Yang said.
Gold is seen as a hedge against inflation that could result
from a large stimulus.
Silver XAG= rose 0.1% to $24.53 per ounce and palladium
XPD= gained 0.2% to $2,335.37, while platinum XPT= fell 0.2%
to $1,019.54.