Gold prices surged over 2% to a more than three-week high on Monday on expectations of global stimulus measures to counter the economic damage caused by the outbreak of the novel coronavirus.

Spot gold was up 2.2% at $1,656.70 per ounce by 2:14 p.m. EDT. U.S. gold futures were up 3.2% at $1,698.20.

“Physical demand continues to dominate and support gold prices. Massive amounts of stimulus are effectively diluting currencies so gold demand is coming from all directions,” said Phil Streible, chief market strategist at Blue Line Futures in Chicago.

The U.S. dollar stalled against most currencies but continued its rise versus the Japanese yen as the rate of deaths from coronavirus in Europe slowed while deaths in Japan and elsewhere in Asia accelerated.

Japan is to impose a state of emergency in Tokyo and six other prefectures as early as Tuesday to contain the coronavirus, while the government prepares a $990 billion stimulus package to soften the economic blow.

The pandemic has infected more than 1,250,000 people around the world, with over 68,400 deaths, according to a Reuters tally.

The coronavirus is the European Union’s biggest test, German Chancellor Angela Merkel said on Monday, adding that it was important that the bloc emerges strong from the economic crisis unleashed by the pandemic.

Governments and central banks around the world have unleashed unprecedented fiscal and monetary stimulus and other support for economies floored by the coronavirus pandemic.

“We think the set-up for a multi-year bull market is being cemented as the market is awash with both monetary and fiscal stimulus while rates are at the zero bound,” analysts at TD Securities said in a note.

“Which suggests investors will continue to seek gold’s warm embrace as real global rates become entrenched in negative territory.”

Reflecting investor sentiment, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.7% to 978.99 tonnes on Friday — the highest in more than three years.

Meanwhile, the enhanced delivery gold futures contract launched by CME Group Inc., enabling delivery of 100-ounce, 400-ounce, or kilo bars, has also started trading.

Among other precious metals, autocatalyst palladium was down 2.9% at $2,055 per ounce. Platinum gained 1.3% to $736 per ounce, while silver climbed 3.8% to $14.92 per ounce.

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