NEW YORK: Gold climbed more than 1% on Friday as the dollar retreated to a near three-week low and increased bets for fresh US stimulus pushed investors to bullion as a hedge against likely inflation. Spot gold rose 1.5% to $1,920.92 per ounce by 1:31 p.m. EDT (1731 GMT), en route to a second straight weekly gain, of about 1.2%. US gold futures settled up 1.6% at $1,926.20.

"It seems like a lot of optimism is being built around it (US stimulus)" and "that's really at the forefront" of gold's move, said Eli Tesfaye, senior market strategist at RJO Futures. After stalling talks with Democrats on a comprehensive aid package earlier this week, US President Donald Trump called for a "skinny" relief bill that would include a bailout of the struggling airline sector.

Additionally, a widening lead for Democratic presidential candidate Joe Biden has raised the prospect of further stimulus, adding to gold's allure. Near-zero interest rates and unprecedented money printing by central banks to ease the economic blow from the coronavirus pandemic have driven a 26% rally for gold this year.

Silver jumped 4.4% to $24.87 per ounce and is up about 5% so far this week. Platinum rose 2.6% to $884.28 and palladium climbed 2.9% to $2,440.68 per ounce.