Spot gold was up 1 per cent at $1,859.56 per ounce by 0713 GMT, after hitting its highest since September 2011 at $1,865.35 earlier in the session.
US gold futures rose 0.9 per cent to $1,860.40.
“The spectre of these stimulus packages has pushed investors back into non-yielding assets like gold,” said ANZ analyst Daniel Hynes.
“The likelihood of interest rates remaining low for the foreseeable future and the weaker US dollar have really boosted investor appetite.”
European Union leaders on Tuesday sealed a 750 billion euro recovery plan, while White House officials and top congressional Democrats discussed another round of relief that would include extended unemployment insurance and more money for schools.
Helping bullion’s rally, the dollar index held near a more than four-month low.
Coronavirus cases continued to surge in the United States, and crossed the 15-million threshold globally.
Underscoring the pandemic’s impact, Japan’s factory activity contracted for a 15th straight month in July.
Central banks have slashed interest rates and rolled out a wave of stimulus measures to cushion the economic damage from the pandemic, helping gold prices surge over 22 per cent so far this year.
Silver was up 4.8 per cent at $22.34 per ounce after hitting its highest since October 2013 at $22.82.
“Silver spot prices have outperformed gold so far this month, an interesting reversal of the norm,” said Cailin Birch, global economist at The EIU, adding that it reflected market optimism for global industry, as silver has many industrial uses.
“Overall, we expect demand for safe-haven assets like gold and silver to remain relatively strong for the remainder of 2020.”
Palladium gained 0.7 per cent to $2,172.18 and platinum rose 0.9 per cent to $889.47.