By Diptendu Lahiri
(Reuters) - Gold prices surged to their highest since October 2012 on Tuesday, driven by a weakness in the U.S. dollar and widespread monetary stimulus packages by central banks as a jump in coronavirus cases dents the economic outlook.
Spot gold climbed 0.7% to $1,767 per ounce by 12:22 p.m. EDT (1622 GMT), having hit $1,768.96, its highest since October 2012. U.S. gold futures were up 0.9% to $1,782.30 per ounce.
"The tsunami of stimulus coming in from everywhere is not only inflationary but also painting a weaker picture for the economy and making gold look attractive," said Edward Meir, analyst at ED&F Man Capital Markets.
Gold has gained nearly 16% this year supported by global stimulus measures since the non-yielding metal is considered a hedge against inflation and currency debasement.
The dollar was down 0.5% at 96.55 against a basket of currencies, making gold cheaper for non-U.S. currency holders.
More than 9.14 million people have been reported to be infected by the coronavirus globally and 473,031 have died, a Reuters tally showed on Tuesday.
Gold's gains came despite a rise in equities driven by encouraging economic data and after U.S. President Donald Trump tweeted the U.S.-China trade pact was "fully intact". [MKTS/GLOB]
"Gold's biggest enemy right now is if other markets grab attention and capital," said Tai Wong, head of base and precious metals derivatives trading at BMO.
"Barring a poor close under $1,750 in the coming days the October 2012 high of about $1,800 should only be a matter of time, a week, perhaps less."
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.58% to 1,166.04 tonnes on Monday, a level last seen in April 2013.
Elsewhere, palladium was little changed at $1,937.37 per ounce, platinum was up 1.1% at $831.03 per ounce and silver rose 0.6% to $17.93 per ounce.
(Reporting by Diptendu Lahiri and Swati Verma in Bengaluru; Editing by Sandra Maler and Tom Brown)