Gold prices jumped about 1% to more than a one-week high on Thursday, emboldened by hopes of more stimulus from the US Federal Reserve as a coronavirus-led lockdown takes a toll on the world's largest economy and labor market.
Spot gold was up 1.1% to $1,731.49 per ounce at 11:38 a.m. EDT (1538 GMT). Earlier in the session, prices touched $1,738.58, the highest level since April 14.
US gold futures gained 1.1% to $1,758.20.
"Supporting gold is the continuation of global central bank stimulus, particular today ... Here in the US we're voting on an additional $500 billion stimulus bill," said David Meger, director of metals trading at High Ridge Futures.
Hundreds of members of the US House of Representatives will gather in Washington on Thursday to pass a $484 billion coronavirus relief bill, bringing the unprecedented total of funds approved for the crisis to nearly $3 trillion.
Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement.
The US Labor Department said 4.427 million more people applied for unemployment benefits last week, taking the total in the past five weeks to a record 26 million, as restrictions to curb the coronavirus outbreak slam the economy.
"The unemployment rate seems poised to hit the 20% level and this alone should be reason enough for the Fed and Trump administration to keep throwing stimulus into the economy," Edward Moya, a senior market analyst at broker OANDA, said in a note.
"Gold's climb towards $1,800 per ounce continues. The stimulus trade is not going away anytime soon and that should mean record highs for gold (in dollar terms) by the summer."
Reflecting investors' interest in gold, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.9% to 1,042.46 tonnes on Wednesday - their highest in nearly seven years.
Among other precious metals, palladium was up 5.1% to $2,037.68 an ounce and platinum rose 0.6% to $762.07. Silver was 1% higher at $15.31.
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