(Adds comments; updates prices)
* Bank of England policy decision due at 1200 GMT
* Dollar index at more than 2-year low
* Interactive graphic tracking global spread of coronavirus:
* tmsnrt.rs/3aIRuz7 in an external browser
By Diptendu Lahiri
Dec 17 (Reuters) - Gold prices rose as much as 1% on
Thursday as the dollar index extended its slide on progress with
U.S. stimulus plans and the Federal Reserve's commitment to pump
more cash into the economy and keep interest rates low.
Spot gold was up 0.5% to $1,874.14 per ounce at 1030
GMT, having hit a near one-month high of $1,882.76 earlier in
the session. U.S. gold futures were up 1.1% to $1,878.50.
"The Fed's decision clearly indicates that it is not
convinced of an economic recovery yet," Quantitative Commodity
Research analyst Peter Fertig said.
"Given, the stand of the Fed and other central banks, there
are indications that inflation will go up in future and with the
dollar index down quite a bit, gold looks like an attractive
Legislators said on Wednesday, U.S. congressional
negotiators were "closing in" on a $900 billion COVID-19
assistance package planned to provide $600-$700 stimulus checks
for individuals, dragging the dollar to a more than two year
The Fed has also vowed to maintain its bond-buying policy
until the U.S. economic recovery is secure.
"If the central banks keep tolerating a higher inflation
level, it will bring down real rates further, helping reduce the
opportunity cost of holding gold," said Ravindra Rao, vice
president, commodities at Kotak Securities.
Investors are now eyeing the Bank of England's policy
decision, due at 1200 GMT, where it is expected to refrain from
"Fundamentally, gold is still quite strong and if it closes
above $1,880 an ounce today we might see it going up to $1,950
before the year ends," Rao said.
In other metals, silver rose 1.2% to $25.65 an ounce.
Platinum gained 1.6% to $1,050.83 and palladium
was up 0.9% to $2,347.65.
(Reporting by Diptendu Lahiri in Bengaluru; Editing by Mark