* Dollar slips to near one-week low
* Silver could rally to $40/oz over next 12 months -Citi
* Pelosi optimistic of U.S. fiscal aid before election
* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)
By Asha Sistla
Oct 19 (Reuters) - Gold rose about 1% on Monday as the dollar retreated and expectations for a U.S. stimulus deal ahead of the Nov. 3 presidential elections bolstered bullion's appeal as an inflation hedge.
Spot gold XAU= rose 0.4% to $1,906.36 per ounce by 1:49 p.m. EDT (1749 GMT). U.S. gold futures GCv1 settled up 0.3% to $1,911.70.
Gold is strengthening on the dollar's downtrend and "the belief that some kind of stimulus package is going to come through in the next 48 hours," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
"People believe that we are going to go into an inflationary period into the next quarter. So they are starting up front on that."
The dollar .DXY slipped 0.4% versus rivals, making gold less expensive for holders of other currencies. USD/
U.S. House Speaker Nancy Pelosi said on Sunday that differences remained with the Trump administration on a wide-ranging relief package but that she was optimistic legislation could be pushed through before election day. has gained over 25% so far this year as investors sought refuge from a worsening coronavirus pandemic and risks of inflation and currency debasement as global central banks slashed interest rates and pumped out unprecedented stimulus.
Further underpinning safe-haven demand for bullion were concerns surrounding fresh coronavirus-led restrictions in Europe and elsewhere as worldwide infections exceeded 40 million, as well as uncertainty over the U.S. elections. XAG= climbed 1.3% to $24.48, having hit a near one-week peak.
Citi said in a note it expected silver to rally to $40 over the next 12 months, on sustained investor demand and a recovery in industrial consumption in 2021. XPT= fell 0.1% to $858.93 per ounce, while palladium XPD= rose 0.6% to $2,345.80.