Gold surged 2.5 percent on Wednesday to above $1,700 an ounce, its biggest one-day gain in four months, as the US Federal Reserve said interest rates would likely remain near zero into late 2014. Bullion's rally dwarfed the slight gains in equities and other commodities as the US central bank affirmed views that the pace of US economic recovery remained sluggish.
Investors piled into gold on fears that their portfolio values will shrink due to currency depreciation as global central banks use easy monetary policies to flood markets with cash to boost ailing economies, a fund manager said. Spot gold was up 2.7 percent at $1,710.44 an ounce by 4:33 pm EST (2133 GMT), after rising to a session peak of $1,712.80, its highest since December 12. US February gold futures settled up $35.60 at $1,700.10 an ounce. Silver rose 4.1 percent on the day to $33.31 an ounce. Platinum group metals also rose, with platinum up 2 percent at $1,575.85 an ounce, while palladium rose 2 percent to $690.47 an ounce.