Gold surges in London

Gold surged 3.5 percent on Thursday as the dollar weakened against the euro and as equity markets slipped. The US currency had already traded lower for much of the session as expectations for a US rate hike receded after comments from the Federal Reserve on Wednesday.
Gold rose to $909.60/910.60 an ounce at 1410 GMT from $879.60/880.60 an ounce late in New York on Wednesday. Earlier in the session it touched $910.60, its highest level since May 27.
The combination of a weak dollar and a slide in the equity markets on concerns over the health of the automotive sector "has been critical for gold", Merrill Lynch analyst Daniel Hynes said. "This has set gold off again after it had been stuck in a trend for a while now," he said.
Platinum and silver tracked gold higher, rising 3 percent and nearly 5 percent respectively. The US Federal Reserve dampened hopes for a rate hike, saying inflation, while still a worry, was likely to temper later in the year.
"The Fed wasn't as hawkish as the market expected, hence the dollar is under pressure," said J.P. Morgan analyst Michael Jansen. "People are starting to worry that the Fed might be slightly behind the inflation story." Fitch Ratings' decision to lower its credit ratings on General Motors and Chrysler LLC on Wednesday has also hurt the dollar, already reeling from the Fed's softer rhetoric on inflation.
Oil, the other main external driver of the oil price, also surged, trading up more than $4 a barrel at its session high on the weaker dollar and bullish remarks from Opec Secretary General Chakib Khelil. A slide in US equity markets at the open on Thursday is meanwhile dampening expectations for a recovery in the US economy, and boosting gold's safe haven appeal.
All three major US indices fell 1 percent or more as the market opened amid worries on the banking sector and among technology companies. In industry news, Gold Fields Limited said it has shut down a shaft of its Kloof Gold Mine in South Africa after two employees were killed early on Thursday following an earth tremor. The company said it has lost 20 kilogrammes of gold from the closure.
Meanwhile spot platinum rose in line with gold, climbing more than 3 percent to a session high of $2,078.00. It later eased back to trade at $2,045.50/2,065.50 an ounce against $2,004.50/2,024.50 late in New York on Wednesday.
Silver also tracked gold, rising nearly 5 percent to a session high of $17.32. Later it was trading at $17.27/17.32 an ounce from $16.56/16.62 an ounce. Among other precious metals, spot palladium was little changed at $460.50/468.50 an ounce from $460.00/468.00 an ounce.