2020.03.2410:51:00UTC+00Gold Rallies As Dollar Extends Weakness On Fed Boost

Gold prices rallied on Tuesday to extend gains from the previous session after the U.S. Federal Reserve launched unlimited bond buying and promised other steps to support the world's largest economy, which is reeling from the coronavirus pandemic.

Spot gold jumped 3.5 percent to $1,607.05 per ounce, after rising 3.7 percent on Monday, the highest percentage gain since June 2016. U.S. gold futures were up as much as 5.2 percent at $1,649.

U.S. President Donald Trump praised Fed Chair Jerome Powell after the central bank said it would purchase an unlimited number of Treasury bonds and mortgage-backed securities to support smooth market functioning.

The Fed said it would go beyond the $700 billion in asset purchases announced last week. The U.S. central bank proposed to buy a wide range of investments, including corporate bonds for the first time, to improve trading in markets that help home buyers finance the purchase of houses, state and local governments borrow and businesses get enough short-term cash to make payroll.

Investors also cheered reports suggesting that U.S. Senate leaders and the Trump administration appear closer to reaching bipartisan agreement on a stimulus bill that would inject nearly $2 trillion into the economy.