Gold prices jumped 1% on Monday as investors cheered news that U.S. President Donald Trump signed into law a long-awaited pandemic aid bill, with a weaker dollar lending further support.

Spot gold was up 1% at $1,894.44 per ounce by 0344 GMT, after hitting a one-week high of $1,900.04 earlier in the day. U.S. gold futures gained 0.9% to $1,899.10.

Trump on Sunday signed into law a $2.3 trillion pandemic aid and spending package, restoring unemployment benefits to millions of Americans and averting a partial federal government shutdown.

“Markets are rallying on the stimulus bill,” said Stephen Innes, chief global market strategist at financial services firm Axi.

“(But) we’ve been talking about this deal for a long time, so how much the market is going to follow through will be the big question.”

The dollar was down 0.2% against rivals, lifting bullion’s appeal for other currency holders.

Investors are now keeping a close eye on a U.S. House of Representatives vote on Monday to increase coronavirus relief checks to individuals from $600 to $2,000, with Trump saying the Senate “will start the process” to approve higher payments.

While gold could move above $1,900 an ounce, it will likely need the dollar to weaken further in order to sustain itself above the level, Innes added.

Gold, seen as a hedge against inflation, has gained more than 24% this year, largely driven by a raft of stimulus measures to mitigate the impact of the pandemic.
Silver was up 2.8% at $26.56 an ounce, after hitting a one-week high of $26.75 earlier in the session. Platinum climbed 1.2% to $1,036.22 and palladium was up 0.5% at $2,360.79.