PRECIOUS-Gold rises to one-week high on economic stimulus hopes

(Updates prices) * SPDR gold holdings at close to seven-year highs * U.S. initial weekly jobless claims data due at 1230 GMT * Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7 in an external browser By Brijesh Patel April 23 (Reuters) - Gold rose to a one-week high on Thursday on the expectation of more stimulus from central banks to limit the economic damage from the coronavirus pandemic as most countries extend lockdowns to curtail its spread.

Spot gold was up 0.7% at $1,726.11 an ounce by 1203 GMT. U.S. gold futures gained 0.8% to $1,752.40. "Gold is rising because the opportunity cost of holding bullion is becoming attractive. You can print money but not gold; there are supply limitations," said Bank of China International analyst Xiao Fu. "There are a couple of central bank meetings coming up next week and they could unleash further money tree accommodation. Investors are looking for some asset class in the current situation that is relatively safe."

Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement. Indicative of sentiment, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust , rose 0.9% to 1,042.46 tonnes on Wednesday - their highest in nearly seven years. The U.S. House of Representatives expects to pass a coronavirus relief bill worth nearly $500 billion on Thursday but will put off any decision on changing its voting rules to avoid a potential partisan fight.

European Union leaders will move towards joint financing of a recovery after the COVID-19 pandemic by asking the European Commission to propose a fund sufficiently big for the job that targets the most affected sectors and regions. The pandemic, which has battered global growth and rattled financial markets around the world, has prompted governments and central banks to roll out a wave fiscal and monetary support.

"Gold may be a safer bet as weakening equity markets, along with negative real rates and continued fiscal and monetary stimulus should all provide another boost to the precious metal," FXTM analysts said in a note, adding that it expects gold to overtake the 2011 peak of $1,925 over the coming months. Meanwhile, tensions in the Middle East resurfaced after President Donald Trump instructed the U.S. Navy to fire on any Iranian ships that harass its ships at sea.

Investors also awaited U.S. initial weekly jobless claims data scheduled for 1230 GMT. Among other precious metals, palladium climbed 1.4% to $1,964.48 an ounce, platinum rose 0.5% to $761.58 and silver gained 0.5% to $15.23. (Reporting by Brijesh Patel in Bengaluru Editing by Elaine Hardcastle and David Goodman)