LONDON: Gold surged to a nine-year peak on Wednesday on bets that central banks would introduce more stimulus measures to ease the economic impact of coronavirus, while silver scaled a near seven-year high on hopes of a rebound in industrial activity.
Spot gold hit its highest since September 2011 in early trade at $1,865.35, and by 1113 GMT was up 0.9% at $1,858.39 per ounce. US gold futures were 0.9% higher at $1,859.60.
"The fact that governments, central banks and pretty much everyone else are looking to more fiscal and monetary policy inputs is helping drive the yellow metal," said Michael Hewson, chief market analyst at CMC Markets UK.
With equities struggling to push higher, gold is likely to test $1,900/oz over the next few days and weeks, Hewson said, adding that only an improvement in the pandemic situation and the economy could stop gold's bull run.
Adding to a slew of global measures, European Union leaders on Tuesday sealed a 750 billion euro ($867.5 billion) recovery plan, while White House officials and top congressional Democrats also discussed another round of relief measures.
Non-yielding gold has surged nearly 22% this year, bolstered by low interest rates and the wave of stimulus.
Coronavirus cases have crossed the 15-million threshold globally.
Meanwhile, US-China friction intensified after Washington told the Chinese consulate in Houston to shut down in three days, prompting Europe shares to slip.
Restricting bullion's ascent, the dollar rose 0.1% against rivals.
Elsewhere, silver climbed 4% to $22.18 per ounce, having earlier hit its highest since October 2013 at $22.82.
The performance of silver, which also has industrial uses, relative to gold this month reflected market optimism for a global industry revival, said Cailin Birch, global economist at the EIU.
"Overall, we expect demand for safe-haven assets like gold and silver to remain relatively strong for the remainder of 2020."
Palladium slipped 1.7% to $2,121.10 per ounce and platinum rose 0.8% to $889.13.
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