Gold prices fell on Thursday as investors scurried for liquid cash while awaiting the passage of a $2 trillion dollar US stimulus package to combat the economic impact of the coronavirus epidemic. Spot gold fell 0.6% to $1,604.16 per ounce by 0038 GMT.

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US gold futures were up 0.3% at $1,639 an ounce. Republican and Democratic leaders of the US Senate hoped to vote on Wednesday on the $2 trillion emergency package to alleviate the devastating economic impact of the virus. A last-minute obstacle to the passage of the stimulus bill was in the process of being resolved and would likely clear the way for prompt approval of the measure, Senator Lindsey Graham said.

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Asian stock markets made a cautious start following two days of rallies, as investors awaited the passage and details of the US stimulus package to combat the economic fallout from the virus.

New orders for key U.S.-made capital goods fell sharply in February as demand for machinery and other products slumped, suggesting a deepening contraction in business investment that analysts said signalled the economy was already in recession.

European Central Bank chief Christine Lagarde asked euro zone finance ministers during a video conference on Tuesday evening to seriously consider a one-off joint debt issue of "coronabonds" to help fight the epidemic, four officials said.

Germany`s economy could contract by as much as 20% this year due to the virus impact, an Ifo economist said on Wednesday.

The World Bank and the International Monetary Fund urged official bilateral creditors to provide immediate debt relief to the world`s poorest countries as they grapple with severe consequences of the virus.

SPDR Gold Trust, the world`s largest gold-backed exchange-traded fund, said its holdings rose 1.41% to 949.15 tonnes on Wednesday.