Gold rose to its highest in nearly nine years on Thursday, driven by an escalation in U.S.-China tensions, while expectation of more stimulus measures lifted the metal's appeal as an inflation-hedge. Spot gold was up 0.1% at $1,872.75 per ounce, after hitting its highest since September 2011 at $1,876.16 in early Asian trade. U.S. gold futures rose 0.2% to $1,869.30. The United States gave China 72 hours to close its consulate in Houston amid accusations of spying, marking a dramatic deterioration in relations between the world's two biggest economies. Coronavirus cases continued to surge in the United States, with California officially becoming the worst-hit state, exceeding New York, with more than 414,000 cases of COVID-19. Gold is often used as a safe store of value during times of political and financial uncertainty.Indicative of sentiment, SPDR Gold Trust, theworld's largest gold-backed exchange-traded fund, said its holdings rose 0.4% to 1,225.01 tonnes on Wednesday from 1,219.75 tonnes on Tuesday. Further helping gold, the dollar index held near a more than four-month low that it hit in the previous session.