PRECIOUS-Gold rebounds on Fed's rate decision, ECB stimulus hopes

(Updates prices)
* U.S. Fed keeps interest rates near zero
* ECB policy decision due later on Thursday
* Asian stocks jump to seven-week high
* For an interactive graphic tracking the global spread,
open https://tmsnrt.rs/3aIRuz7
in an external browser

By Shreyansi Singh
April 30 (Reuters) - Gold bounced back from early losses on
Thursday, buoyed by the U.S. Federal Reserve's decision to keep
interest rates near zero and hopes of fresh European Central
Bank stimulus.
Spot gold XAU= rose 0.4% to $1,717.27 per ounce by 0908
GMT. U.S. gold futures GCcv1 rose 1.0% to $1,730.80 per ounce.
"The massive support we're getting from the Fed is
underpinning the general trend of support for gold... Gold is
going to look very attractive as it doesn't cost anything to
hold it right now," said Stephen Innes, chief market strategist
at financial services firm AxiCorp.
The weakness in the dollar and expectations that the
European Central Bank may "also play some catch up" gave gold an
extra boost, he added.
Risk sentiment got a boost after positive early trial
results of an experimental antiviral drug that helped patients
recover more quickly from the illness caused by the coronavirus.
Asian stocks rose to a fresh seven-week high on the news,
while the U.S. dollar slipped to a two-week low earlier in the
session, making gold cheaper for investors using other
currencies. MKTS/GLOB USD/
The Fed left its interest rates near zero on Wednesday and
repeated a vow to use its "full range of tools" to shore up an
economy hammered by the pandemic.
Investors are now awaiting a policy decision from the ECB,
amid pressure on the central bank to deploy even more firepower
to prop up the economy. "Negative real interest rates, easy money supply, heightened
macroeconomic risks and fading USD strength together form the
benign backdrop for gold investors. We see flight to safety
investments attracting fund flows in gold," ANZ analysts said in
a note.
Lower interest rates reduce the opportunity cost of holding
non-yielding gold, which also tends to benefit from widespread
stimulus measures as it's often seen as a hedge against
inflation and currency debasement.
Pointing to the growing economic pain from the virus
outbreak and bolstering demand for safe havens such as gold, the
U.S. economy contracted in the first quarter at its sharpest
pace since the Great Recession, while economists expect an even
sharper contraction in the second quarter. Among other precious metals, palladium XPD= rose 2.0% to
$1,974.89 an ounce, platinum XPT= gained 0.2% to $776.12 per
ounce, while silver XAG= was little changed at $15.36 per
ounce.