NEW YORK: Gold rose early on Friday in New York trade and set to post its best week since July, as the dollar weakened and increasing chances of a Joe Biden victory in the US presidential election boosted hopes for a larger coronavirus relief bill.

Spot gold rose 0.1% to $1,949.81 per ounce by 11:01 a.m. EST (1601 GMT), on track for a 3.9% weekly gain, the most since late July. US gold futures rose 0.1% to $1,949.10.

"A devaluation of the US dollar has driven gold prices to six-week highs, also some safe-haven demand amid the uncertainty of the presidential elections and rising COVID cases," Kitco Metals senior analyst Jim Wyckoff said.

"The market is factoring in a Biden victory, (which) will lead to more government stimulus programmes and that could introduce some problematic price inflation down the road and also deflate the value of (the) dollar."

Gold, considered a hedge against inflation and currency debasement, has risen 28% this year on the back of massive global stimulus to help coronavirus-hit economies.

"Although the continued US election uncertainty is taking away the prospect of an immediate stimulus package, markets believe that one would eventually be coming, and so that may be why gold is moving up," ED&F Man Capital Markets analyst Edward Meir said. Silver gained 0.3% to $25.40 an ounce. Platinum eased 0.2% to $891.33 and palladium jumped 2.2% at $2,429.16.