PRECIOUS-Gold gains on renewed hopes of U.S. stimulus deal, weaker dollar

* Spot gold hits one-week peak at $1,920.27/oz
* Gold may test resistance at $1,935/oz- technical analyst
* Dollar hits one-month trough
* Interactive graphic tracking global spread of coronavirus:
open
* https://tmsnrt.rs/3aIRuz7 in an external browser

(Updates prices)
By Eileen Soreng
Oct 21 (Reuters) - Gold rose on Wednesday as optimism that
U.S. lawmakers could reach an agreement on a pre-election
coronavirus relief package weakened the dollar and bolstered
bullion's appeal as a hedge against inflation.
Spot gold XAU= gained 0.6% at $1,918.56 per ounce by 0742
GMT, after hitting a one-week high earlier in the session. U.S.
gold futures GCv1 were up 0.4% at $1,922.10 per ounce.
The White House and Democrats in the U.S. Congress moved
closer to agreement on Tuesday as President Donald Trump said he
was willing to accept a large aid bill despite opposition from
his Republican Party. The news lifted appetite for equities and sent the dollar
index .DXY to a one-month low, bolstering gold's appeal to
other currency holders. USD/
"The falling U.S. dollar is the main contributor to gold's
rally ... Gold may eventually complete this consolidation period
and trend upwards," said Margaret Yang, a strategist with
DailyFx, which covers currency, commodity and index trading.
"A very accommodative monetary and fiscal policy
environment, low interest rates and uncertainties surrounding
the virus and presidential elections" could push prices to
$2,000 and above by end-2020, Yang added.
Gold has been range-bound near the psychologically important
$1,900 level in the past few sessions, as investors tracked
developments on the U.S. stimulus.
Prices have gained more than 26% this year, helped by
near-zero interest rates globally and unprecedented stimulus to
ease the economic blow from a worsening pandemic.
The market needs more certainty on the stimulus front
before taking a position, IG Markets analyst Kyle Rodda said.
Gold may test a resistance at $1,935 per ounce, a break
above which could open the way towards $1,967, according to
Reuters technical analyst Wang Tao. Elsewhere, silver XAG= rose 1.4% to $24.99 per ounce,
platinum XPT= was up 0.7% at $877.25 and palladium XPD=
gained 0.4% at $2,409.00.