Gold rose 1% on Wednesday after a steep fall in the previous session, as doubts about a stimulus package proposed by U.S. President Donald Trump to soften the economic impact of the coronavirus epidemic weighed on risk sentiment.

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Spot gold was up 0.7% at $1,661.21 per ounce by 0803 GMT, having fallen nearly 2% on Tuesday on hopes for global stimulus measures. U.S. gold futures gained 0.1% to $1,661.70.

The White House and Congress negotiated measures on Tuesday to bolster the U.S. economy and Americans` paychecks against the epidemic`s impact, although there was no immediate sign of a deal.

"Risk sentiment has turned sour ... the market is pretty disappointed by Trump`s delay of the stimulus package, which he had promised on Tuesday," CMC Markets analyst Margaret Yang Yan said.

Asian shares and Wall Street futures fell as growing scepticism about Washington`s stimulus package knocked the steam out of an earlier rally.

A central feature of the legislative proposal is payroll tax relief, although the extent and duration of the proposal were unclear.

Further supporting bullion, U.S. 10-year Treasury yields drifted lower, resuming their march towards a record low touched on Monday, while the dollar index also fell.

More than 117,100 people have been infected globally by the virus.

Central banks, meanwhile, were seen stepping up efforts to combat the economic fallout of the epidemic. The Bank of England unexpectedly cut interest rates on Wednesday, after the U.S. Federal Reserve slashed its benchmark rates in an emergency move last week.

European Central Bank head Christine Lagarde will participate in a video conference of the EU`s 27 leaders to discuss measures to counter the virus impact, the Council of the European Union said in a tweet.

Holdings in the world`s largest gold-backed exchange-traded fund (ETF), SPDR Gold Trust, slipped 0.2% to 962.03 tonnes on Tuesday, but were still near their highest in more than three years.

"ETFs are reflecting investment. We might have some inflows and outflows day to day but the overall increase is quite strong," said Soni Kumari, a commodity strategist at ANZ, adding that the lower interest rates environment and safe-haven demand were boosting inflows into ETFs.

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Lower interest rate reduces the opportunity cost of holding non-yielding bullion.

Elsewhere, palladium fell 3.1% to $2,345.94 per ounce, while platinum was up 0.7% to $875.00. Silver rose 1% to $17.03 per ounce.