PRECIOUS-Gold hits one-week high on muted dollar, U.S. stimulus hopes

(Updates prices)
* Britain approves Pfizer-BioNTech's COVID-19 vaccine
* Interactive graphic tracking global spread of coronavirus:
open
* https://tmsnrt.rs/3aIRuz7 in an external browser

By Eileen Soreng
Dec 2 (Reuters) - Gold rose to over a one-week high on
Wednesday supported by a soft dollar, while signs of progress in
discussions over a new U.S. coronavirus relief package bolstered
bullion's appeal as a hedge against possible inflation.
Top Senate Republican Mitch McConnell urged the U.S.
Congress to pass a $1.4 trillion spending bill including
coronavirus stimulus, while some senators and House members
proposed relief measures worth $908 billion. Spot gold XAU= rose 0.6% to $1,825.41 per ounce by 1200
GMT, having earlier hit $1,832.20, its highest since Nov. 24.
U.S. gold futures GCv1 gained 0.6% to $1,829.30.
"There's a risk that you could get a little bit of
inflation... There is a good possibility we will retest $1,835-
$1,836 level," said Michael Hewson, chief market analyst at CMC
Markets UK.
However, more positive vaccine news could push more money
out of gold and into riskier assets, Hewson added.
Making bullion cheaper for holders of other currencies, the
dollar steadied off a low since April 2018. USD/
Near-zero interest rates and unprecedented stimulus to
revive the global economy have driven gold about 20% higher so
far in 2020, since the non-yielding asset is considered a hedge
against likely inflation and currency debasement.
Gold, however, marked its worst monthly performance in four
years in November hit by optimism over vaccine-led economic
recovery.
Britain became the first country in the world on Wednesday
to approve Pfizer-BioNTech's vaccine. 2021 will be a mixed year for gold, positive in the first
half and negative in the second, said UBS analyst Giovanni
Staunovo.
"Essentially it's driven by the vaccine use influencing
central bank activity ... I'm not saying there will be a rate
cut, but there'll be some discussion about a change in the
policy environment and gold will start to feel the pain (in the
second half)," he said.
Elsewhere, silver XAG= rose 0.4% to $24.10 per ounce.
Platinum XPT= rose 1% to $1,009.47 and palladium XPD= eased
0.2% to $2,402.46.